Dutch Companies Form $1B U.S. Retail Fund

At a time when many U.S. banks and investors are shying away from investing in new projects, United Investment Co. and SNS Property Finance International–both of the Netherlands–have formed a joint venture to establish a $1 billion real estate investment and development fund dedicated to the U.S. retail real estate market. The fund will operate under the direction and management of United Investment’s U.S. holding company, UDC Global and its development arm, N3 Real Estate of Fort Worth, Texas, which will act as the exclusive developer for the fund. The fund will focus on credit tenant net lease retail transactions. N3 already has an existing relationship with retailers including Chase Bank, Starbucks Coffee, Target and Circuit City. As the credit tenant net lease developer for the Fund, N3 will construct buildings and other improvements for the fund to the retailer’s specifications. UDC acquired N3 as its catalyst to accelerate American real estate investments in 2007. “Financing for these deals in the U.S .from banks and investors is almost non-existent right now. We meet retailers every day who can’t get financing to build deals for them, so we see this as a great opportunity,” Biff McGuire, CEO of UDC Global in America, told CPN. “And the currency exchange from the euro to the dollar is very attractive along with it being a great market opportunity with the money coming from the Netherlands.” N3 has closed 14 credit tenant net lease retail projects totaling $40 million already on projects including Starbucks, Chase Bank, Sonic, Whataburger, Game Stop and Alltel sites in Texas, Oklahoma and Florida. UDC and N3 are now expanding their core base of operations from Texas to the Southeastern and Southwestern regions of the country with new offices and/or through joint ventures with local developers. “This is a long-term plan and not a short term plan,” McGuire said. “We’re only going to do the deals that meet our investment criteria as part of a nine-year investment plan. Many of the deals are in the Southern states because those are high growth states and several are easier to develop in. But, we are tenant focused and following them where they’re going.” In addition to serving as UDC’s equity partner, SNS will provide construction and permanent financing for the fund.United Investments B.V. began investing in the U.S. in 1997 investing in the Georgian Resort, a 2,000-acre planned community designed around a Tom Fazio golfcourse owned by United Investment. In 2006, UDC expanded its real estate holdings in the U.S. with additional residential developments in Atlanta and Baton Rouge. To date, UDC owns more than $200 million in American real estate.