CBRE Global Investors Closes U.S. Value-Added Fund

CBRE Global Investors has closed its Strategic Partners U.S. Value 6 L.P. fund with equity commitments of almost $1.1 billion from 22 institutional investors, surpassing its $750 million target.

 By Gail Kalinoski, Contributing Editor

CBRE Global Investors has closed its Strategic Partners U.S. Value 6 L.P. fund with equity commitments of almost $1.1 billion from 22 institutional investors, surpassing its $750 million target. The fund, which is expected to have total purchasing power of $2.7 billion, has already closed on or been committed to investments totaling more than $900 million.

“We have a proven investment team that has demonstrated the ability to identify assets and markets where value can be enhanced through strong operations,” said Vance Maddocks, president of Strategic Partners U.S. “We sincerely appreciate the partnership we have with our investors and their consultants and the confidence they have placed in us through their commitments to this fund.”

Strategic Partners U.S. Value 6 fund is a continuation and evolution of the firm’s enhanced-return strategy in the United States. The investment team, based in Los Angeles, targets value-added returns through investment in institutional-quality properties judged to have above-average return potential in major metropolitan areas. Strategic Partners U.S. Value 5, which closed in May 2008, made 27 investments totaling $2.7 billion in total capitalization, according to Maddocks.

“Fund 6 is a continuation of the investment strategy employed in Value 5 with modifications in focus markets and asset profile reflecting our current research view on the real estate and capital markets,” Maddocks told Commercial Property Executive.

“The team is looking for institutional-quality, existing office, multi-family, industrial and retail assets in select major metropolitan areas across the U.S.,” he added. “We are investment-driven, looking to acquire properties that fit a specific profile and offer superior value creation opportunities.”

Strategies the firm uses include repositioning underperforming assets and improving occupancy levels through implementation of Strategic Partners’ signature tenant amenity programs, including 5-Star Worldwide for office buildings and Red Carpet for multi-family assets.

Maddocks said Fund 6 has already invested in 11 suburban and CBD office buildings and multi-family properties, including Heritage Square, a 324-unit apartment community in the Denver area that was 93 percent occupied at closing, and One O’Hare, a 380,360-square-foot office building in suburban Chicago that was 89 percent occupied at the time of acquisition. The fund also invested in 400 S. Hope in downtown Los Angeles, a trophy office asset that it acquired in July. At the time, Maddocks told CPE that the fund planned to invest $10 million to $20 million to upgrade and rebrand the 701,500-square-foot tower. The building was 81 percent occupied when Fund 6 acquired it from the Tishman Speyer Properties’ Tishman Speyer Real Estate Venture VI fund. The property reportedly sold for $238.4 million.

Founded in 2000, the Strategic Partners U.S. program has closed eight funds and three co-investment partnerships, raising $5.6 billion. CBRE Global Investors is a global real estate investment management firm with $90.4 billion in assets under management as of Sept. 30. It is an independently operated affiliate of CBRE Group, Inc.

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