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One of Taconic Capital’s latest investments was the mortgage securing JPMorgan International Plaza in Dallas.
Private equity fundraising for real estate shows signs of heating up again in July after a slower pace in the second quarter.
Firms raising money for multifamily and debt investments have been among the first to launch funds this month amid steady activity.
Closed-end private real estate fundraising slowed in the second quarter after two successive quarters of strong capital inflows, according to private equity data provider Preqin. Forty-eight funds secured a combined $23 billion, down from 75 vehicles that raised $38 billion in the first quarter.
“With such a flurry of fundraising in the previous six months, it is perhaps not surprising that [second quarter] saw lower fundraising totals,” Oliver Senchal, head of real estate products for Preqin, said in a statement. “However, it was by no means a bad quarter so much as it was a return to more typical levels. We should see fundraising pick up the pace as we move into [the second half of the year] — there are already 12 vehicles in market that have either met or surpassed their initial targets, collectively securing around $8 billion.”
What was striking to Senchal, however, was the distribution of fundraising across strategies. Low risk or “core” and core-plus funds in particular had a very slow start to the year, which could be a result of pricing concerns, he said.
However, value-added and debt strategies thrived in the second quarter as core funds struggled. That trend has extended into July, CoStar tracking shows. A value-added fund typically invests in real estate that needs to be improved in some way.
Taconic Pursuing Opportunistic Debt Investments
Taconic Capital Advisors in New York has launched its second commercial real estate opportunistic debt fund.
Taconic CRE Dislocation Fund II held its initial closing, raising $310 million toward its targeted goal of $400 million, according to regulatory filings.
Taconic Capital pursues an “event-driven” investment approach seeking to generate strong returns. James Jordan and Jon Jachman run Taconic’s commercial real estate business that focuses on sourcing distressed, value-add opportunities in off-market deals.
As an example of its ‘events-driven’ approach, this past April, Taconic acquired the securitized loan backing JP Morgan International Plaza I and II at14201 and 14221 Dallas North Tollway in Dallas, according to commercial mortgage-backed loan documents summarizing the deal.
The loan transferred to special servicing last October when their single tenant (JP Morgan) decided not to renew leases totaling 756,000 square feet for the two buildings when they were to expire in February 2018. The $225 million loan on the properties was originated in 2006.
Taconic Capital affiliates contributed $10.9 million in new equity at closing of the loan sale and is required to fund another $10.9 million within the first 18 months, according to CMBS documents. The maturity on the loan was extended to June 2021.
In March of this year, Somera Road Inc. and Taconic Capital purchased the mortgages on Northstar Center in Minneapolis and infused new capital. The Northstar Center is now entirely unencumbered and will be marketed for sale as a mixed-use redevelopment opportunity through HFF.
Acres Capital Lines Up New Lending Capacity
Acres Capital Corp., a New York-based private investment firm, closed on a strategic investment from two unidentified global investment firms. The investment provides Acres with more than $500 million of balance sheet lending capacity.
The investment advances Acres’ strategic objective in the U.S. transitional loan market, the company said. Acres is on target to provide $600 million to $800 million in senior financing solutions in 2018.
A couple of Acres Capital’s most recent deals include funding of a loan for the acquisition and completion of a five-story, 39-unit multifamily luxury condominium in Guttenberg, NJ. The property will be marketed to young working professionals seeking an affordable alternative to local rentals.
In addition, it funded a bridge loan that was used to refinance a five-story, single-family townhouse that’s 22 feet wide and has a ground floor commercial space/art gallery. The property, known as the Waterfall Mansion and Gallery, is located in New York’s Upper East Side.
“Our sponsor spent four years meticulously upgrading this one-of-a-kind mixed-use townhouse, while also developing a unique business model to blend art with high-end living,” Mark Fogel, president and chief executive of Acres Capital, said in announcing that deal.
Abacus Capital Launches Fourth Apartment Fund
Abacus Capital Group held its initial closing for a fourth multifamily fund seeking to raise $500 million.
A regulatory filing for Abacus Multi-Family Partners IV showed it has raised $484.5 million of the targeted amount.
Texas Municipal Retirement System has committed $75 million to the fund, according to the pension fund.
New York-based Abacus, formed in 2004 by Benjamin Friedman, is a real estate investment management company focused exclusively on multifamily housing.
Abacus is currently targeting to invest in value-add transactions focused on relative affordability in markets and sub-markets showing favorable multifamily housing demand, according to the Texas fund.
Abacus’ business plans will range from ground up development where market dynamics are favorable to bringing occupancy and rents up at complexes that have historically faced operational challenges and/or underinvestment by prior owners.
This past March, Abacus Multi-Family Partners IV paid a reported $42.6 million to acquire two Rohnert Park, California, apartment complexes with 202 total units: Creekview Place North and South. The north property sold for $21.14 million, or $209,349 a unit, and the South property for $21.55 million, or $211,443 a unit. As part of the deal, Abacus assumed two existing loans totaling $30.8 million.
LCS Closes $300 Million Equity Senior Housing Joint Venture
Life Care Services (LCS), one of the nation’s largest senior housing operators, closed on a $300 million equity senior housing joint venture.
LCS Real Estate will serve as sponsor of the joint venture and will partner with an unidentified institutional investor on the investment platform.
“This investment vehicle is a strategic advantage for LCS,” Joel Nelson, president and CEO of Des Moines, Iowa-based LCS, said in announcing the venture. “The joint venture platform will use discretionary funds to invest in core, value add and development assets, including communities already operated by LCS.”
Life Care Services will provide management services to the acquired and developed communities.
LCS Real Estate has executed on acquisition and development transactions in excess of $800 million since 2016, and currently has an ownership stake in 37 senior housing communities nationwide, including 13 Life Plan Communities.
CBRE Capital Advisors in conjunction with the CBRE National Senior Housing Team was the exclusive financial adviser on the transaction.
