AREA targets $750m with eighth fund

AREA Property Partners has launched its eighth and latest value-added vehicle, PERE has learned. 

Although AREA declined to comment, sources familiar with the situation have revealed that the New York-based fund manager is seeking $750 million in equity commitments for its AREA Value Enhancement Fund VIII. With leverage, the vehicle would have $2.5 billion of buying power.

With the fund, the firm plans to buy or recapitalise commercial properties across the US, with an emphasis on apartment complexes, full-service hotels, grocery-anchored shopping centres and office properties in central business districts. The fund can also buy distressed debt.

In addition, AREA is focussed on seeking properties in Atlanta, Miami, Orlando, Dallas, Houston, Seattle, Northern California, Southern California, Washington DC, New York and Boston with Fund VIII. It is also targeting net IRRs of 12 percent to 15 percent. 

Despite having done so in the past, AREA is not hiring a placement agent to raise the funds this time around, but instead seeking the commitments itself. The minimum commitment to Fund VIII is $10 million. AREA itself will contribute $15 million.

AREA also runs an opportunity-fund series, high-yield-debt vehicles as well as European and India equity funds. Previous investors to AREA’s past funds include CalPERS, New Jersey State Investment, New York State Common Fund, Pennsylvania State Employees and Pennsylvania Public School Employees. AREA Real Estate Opportunity Fund VI originally sought $1 billion, but held a final close in June on $518 million, more than half its original target.