Park Capital Commits Most of $1B to CRE Projects
- Sep 09, 2008
Park Capital Group L.L.C., a Miami-based private equity firm, has announced that it intends to place at least $1 billion in investment funding in the next 12 months, primarily in commercial real estate and primarily in the United States. CEO Matthew Kleinsmith, who founded the company about two years ago, has owned businesses in several industries, including payment processing and factoring. It was through the latter that he developed a relationship with a large hedge fund. A long-time entrepreneur, Kleinsmith told CPN that his background has a lot to do with Park’s current push. Too many developers are “all singing the same tune: ‘We were all set to go, and the bank pulled out on me,’” Kleinsmith said. “I can relate to those people. I’ve been in their shoes.” He’s estimating that 60–70 percent of the $1 billion will go into commercial real estate, mostly into hotels and condos, though he prefers hotels connected with resorts, not stand-alone properties, “We are tilted toward development projects right now,” Kleinsmith said; current development projects include two resorts in Mexico, some condos in Florida and a retail project in the Chicago suburbs. Park’s focus is its equity leveraging and asset-based lending program, he explained, and the company relies on “numerous overseas banking relationships to grow our funding base.” Funds are obtained mostly from European investors, he said, who want to take advantage of the current euro-to-dollar exchange rate. The suburban Chicago retail project that Park is funding is a 50,000-square-foot strip mall in Elgin, anchored by a cybercafe. Park Capital has extended $23 million in straight debt financing on an 80 percent loan-to-value. One of the Mexican resort projects is Punta Perula, just south of Puerta Vallarta. The 24-acre development is just breaking ground and will be completed in 24 to 36 months. Park Capital is putting in $68 million. The other resort is in final negotiations, Kleinsmith said. In overseas markets, he added, “we’re very interested in Vietnam” and also exploring opportunities in South Africa, Panama and Costa Rica.