Regions West | San Francisco
Oct 1, 2007
By: Tonie Auer, Southwest Correspondent
San Francisco-based Carmel Partners Inc. has closed its third discretionary institutional real estate investment fund, Carmel Partners Investment Fund III with total commitments of $700 million. The fund will focus on underperforming properties in markets with high barriers to entry as well as current projects in Northern and Southern California, Seattle, Denver, Washington, D.C., and Hawaii.
Through the fund, Carmel Partners plans to execute on its strategy of value-added investing in multi-family assets, acquiring underperforming properties in markets with high barriers to entry that are supply constrained, and making capital improvements to reposition the properties.
Often, markets with high barriers to entry appear to offer greater protection during an economic downturn or from supply side risk. At any given point in the economic cycle, the asset is likely to hold its value during a sale because of both stronger NOIs as a result of better space fundamentals as well as fewer competing assets available for sale.
"We seek high barrier markets because they tend to have higher home prices with lower supply. This leads to a higher percent of renters," John Williams, managing partner of capital markets at Carmel, told CPN. "We seek value-added opportunities where we can renovate a property by improving the baths, kitchens, amenities and marketing to where it competes close to new construction product, while the entire cost of the project is 40 percent less."
With the close of Fund III, Carmel has raised equity totaling $1.7 billion, and the firm's investments to date consist of 68 properties with a total of 18,500 units. Carmel's investors include endowments and foundations across the country. A Carmel executive said the fund has 26 return investors and four new investors.
Carmel closed its second institutional real estate investment fund, Carmel Partners Investment Fund II in April 2005 with $400 million in equity commitments. To date, Fund II has made 20 investments in six markets with 4,900 units.
Carmel Partners Investment Fund I closed in November 2003 with $215 million in equity commitments. To date, Fund I has returned 100 percent of the capital investment to its investors.
Based in San Francisco, Carmel Partners is a private real estate investment firm, specializing in multi-family transactions within the United States.
By: Tonie Auer, Southwest Correspondent
San Francisco-based Carmel Partners Inc. has closed its third discretionary institutional real estate investment fund, Carmel Partners Investment Fund III with total commitments of $700 million. The fund will focus on underperforming properties in markets with high barriers to entry as well as current projects in Northern and Southern California, Seattle, Denver, Washington, D.C., and Hawaii. Through the fund, Carmel Partners plans to execute on its strategy of value-added investing in multi-family assets, acquiring underperforming properties in markets with high barriers to entry that are supply constrained, and making capital improvements to reposition the properties.
Often, markets with high barriers to entry appear to offer greater protection during an economic downturn or from supply side risk. At any given point in the economic cycle, the asset is likely to hold its value during a sale because of both stronger NOIs as a result of better space fundamentals as well as fewer competing assets available for sale.
"We seek high barrier markets because they tend to have higher home prices with lower supply. This leads to a higher percent of renters," John Williams, managing partner of capital markets at Carmel, told CPN. "We seek value-added opportunities where we can renovate a property by improving the baths, kitchens, amenities and marketing to where it competes close to new construction product, while the entire cost of the project is 40 percent less."
With the close of Fund III, Carmel has raised equity totaling $1.7 billion, and the firm's investments to date consist of 68 properties with a total of 18,500 units. Carmel's investors include endowments and foundations across the country. A Carmel executive said the fund has 26 return investors and four new investors.
Carmel closed its second institutional real estate investment fund, Carmel Partners Investment Fund II in April 2005 with $400 million in equity commitments. To date, Fund II has made 20 investments in six markets with 4,900 units.
Carmel Partners Investment Fund I closed in November 2003 with $215 million in equity commitments. To date, Fund I has returned 100 percent of the capital investment to its investors.
Based in San Francisco, Carmel Partners is a private real estate investment firm, specializing in multi-family transactions within the United States.
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