Wheelock Receives $525M in Commitments for First Fund

The private real estate investment firm says it expects to use the money on a wide range of real estate investments throughout the U.S., from single assets such as hotels to large land deals.

Wheelock Street Capital has closed on $525 million in commitments for its first fund and expects to use that money on a wide range of real estate investments throughout the U.S. from single assets such as hotels to large land deals.

In the past 18 months, the private real estate investment firm has been active, picking up at least four hotels, a student housing complex in Virginia and thousands of acres of residential land from Colorado to North Carolina and Texas. The deals are often executed with high-quality joint venture partners through acquisitions, restructurings and recapitalizations. Led by veteran real estate private equity investors Merrick “Rick” Kleeman and Jonathan Paul, the firm plans to continue that strategy using both the traditional opportunity fund and operator models.

The Wheelock Street Real Estate Fund L.P. received commitments from a variety of investors, including endowments, alternative asset managers, pension plans, foundations and family offices, according to the firm. The fund’s original target was $500 million but it was quickly increased to $525 million after excess demand following the first closing in late 2011.

“We were fortunate to have gained momentum at the outset of the raise due to support from key lead investors,” said Kleeman, a co-founder and managing partner.

“We believe that at this level of capital commitments, the fund is well positioned to capitalize on current market opportunities while maintaining a high level of selectivity and focus,” added Paul, the other co-founder and managing partner.

The two principals founded Wheelock in 2008 after each had more than 20 years of real estate transaction experience at firms like Starwood Capital Group, Rockpoint Group and Westbrook Partners. Wheelock is headquartered in Boston and Greenwich, Conn., with offices in New York City, Washington, D.C., and Tampa, Fla.

While the firm has focused mainly on the hospitality and residential land markets, it also seeks opportunities in office, multi-family, retail and student housing. They have in-house experts on asset classes, particularly the hospitality and residential land markets, but also frequently join with operating partners. In May 2011, Wheelock formed a joint venture with Iconic Development to acquire Terrace View Apartments, a student housing complex near two major universities in Blacksburg, Va.

Wheelock has also invested heavily in residential land in master-planned communities such as Traditions at Heritage, a 364-acre development in Wake Forest, N.C., a suburb of Raleigh, N.C. Once completed, it will have over 700 homes with prices ranging from the $200,000s to more than $500,000. More recently, it bought a 1,700-acre master-planned community near Denver from PulteGroup for the remaining developed lots and undeveloped land in the Anthem Ranch and Anthem Highlands developments.