Transactions - MAY 24, 2013

CBRE actively invests Strategic Partners U.S. Value Fund 6

by Sara Kassabian

CBRE’s Strategic Partners U.S. Value Fund 6 has been acquiring properties throughout the United States. In the past two weeks, the fund has completed six acquisitions. The fund closed in December 2012 with $1.1 billion in equity commitments, and it has between $2.5 billion and $3 billion in buying power, depending upon leverage.

Vance Maddocks, president of Strategic Partners U.S. at CBRE, says the acquisitions come after a six-month lull in investments, and that despite the seemingly sudden influx, the fund remains selective about its investments.

In May, the fund invested in five properties across the United States. Most recently, the fund announced the acquisition of Three Ravinia, a 31-story trophy office building in Atlanta. The property is located in the Central Perimeter submarket, and will be upgraded to include amenities and be a part of CBRE’s five-star program. The other completed May acquisitions include Buffalo Pointe, a class A multifamily community in Houston; Dunwoody Place, a class A apartment community in the Buckhead/Sandy Springs submarket of Atlanta; the San Jose Marriot Hotel in downtown San Jose; and a large apartment complex in Northern Virginia, to be announced next week.

The value-added fund plans to invest about 40 percent of the portfolio in apartment buildings that are either recently completed but distressed due to ownership, or properties built in the late 1990s and early 2000s. It also invests in office properties that are approximately 80 percent leased and require a material repositioning and renovation.

The San Jose Marriot Hotel acquisition was outside of the fund’s investment themes, but it shares characteristics with its portfolio, as it is a high-quality asset in a strong market that was acquired for a discount to replacement cost. 

Maddocks says the fund is targeting high-quality properties that are approximately 80 percent leased located outside of the hyper-competitive gateway markets because these secondary markets offer compelling acquisitions without deep competition.

The fund has an extended period of time to deploy its capital, and does not have a target divestment date, but it will continue searching for opportunities. To date, the fund has invested 65 percent of the capital, or $1.5 billion, in 18 value-added properties across the United States. 

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