Hungerford Properties extends final close date for Western Canada fund

Hungerford Properties, based in Vancouver, British Columbia, has extended the final close date for its Hungerford Properties Western Canada Opportunities Fund (HPWC Opportunities Fund) to March 31, 2013. The fund was originally set to close at the end of 2012, and the extension was due to holiday schedules during the fourth quarter and strong interest from investors in late November 2012.

The firm aims to reach its C$150 million ($152 million) fundraising goal. To date, the value-added/opportunistic fund has raised C$60 million ($61 million), recently accepting a commitment from its first institutional investor.

Andrew Hungerford, a partner with Hungerford Properties, says the fund expects to soon complete an additional C$50 million ($51 million) in commitments. “We’ve had very strong interest from both high-net-worth and institutional investors,” says Hungerford. “And in this market environment, people are not moving quickly. I think they’re taking a lot more time to make decisions. To facilitate the investors’ timelines, we’ve extended our deadline by a few months.”

The fund aims to acquire undervalued class B properties across market classes in gentrifying neighborhoods in Western Canada, specifically Vancouver, Edmonton and Calgary. Targeted properties will typically have income already established, and the firm will use value-add strategies to transition the assets into stabilized, highly valued, class A core properties.

“We source off-market through an approach we call neighborhood mapping,” says Hungerford. “We basically do extensive research on the markets and pick neighborhoods we like. We dig into the neighborhoods and we essentially walk the streets, identifying buildings that fit our profile. We like buildings that have value-add potential.” 

The fund has started to invest its capital. It has committed approximately $12 million into two separate acquisitions. Its first investment with a projected 30 percent IRR is a two-parcel industrial property in Vancouver. Parcel one started as a single-tenant building, which was refurbished into a multi-tenant building. Parcel two began as a three-acre vacant lot, which was transitioned into a 65,000-square-foot food processing and distribution center, where Gordon Food Service has headquartered its seafood brand, Albion Fisheries. The second investment with a projected 39 percent IRR is a property located in a neighborhood adjacent to the Calgary International Airport. The development is named NorthWing Business Park and will create two commercial condo buildings.

The firm plans to launch fundraising of a second fund once this fund is fully invested, in approximately two years.