Azora enters US real estate market via M&A deal

The European private equity real estate manager also plans to begin launching sector-specific funds targeting the country by year-end.

Azora has entered the US property market with the formation of Azora Exan, a new partnership with Exan Capital, a Miami-based real estate manager.

Through Azora Exan, the Madrid-based pan-European private equity real estate manager will have direct investment capabilities in the US. The new platform will combine Exan’s focus on core and core-plus strategies and office and logistics assets with Azora’s expertise in value-add and opportunistic investments and the hospitality and residential sectors.

Exan, which has $1 billion of assets under management and a team of 19 people, is led by Juan José Zaragoza and Ignacio Gil-Casares, who previously held senior positions in Banco Santander’s US real estate business. Founded in 2013, the firm has completed more than $3 billion of real estate transactions across 30 US states, primarily on behalf of high-net- worth and family office clients from Spain, Latin America and the Middle East.

Both parties declined to comment, but PERE understands Azora has acquired a majority stake in Exan as part of the transaction. The firm had been looking to expand its footprint internationally for several years and decided to pursue potential acquisitions or combinations in both Europe and the US to fast track its growth, according to a source familiar with the matter. Deal negotiations were said to have begun early last year, with Exan considered a “cultural fit” because, like Azora’s leadership, the founders are also Spanish and previously worked in Spain, the source said.

Azora Exan will have a strong initial focus on the Sun Belt states, where Exan has historically been most active and had the most expertise. The platform has not deployed any capital to date. Investment capital for Azora Exan will initially come from Azora’s balance sheet, although the parties expect to raise third-party capital from both Exan’s and Azora’s existing relationships as well as new relationships in the US.

Most of Azora’s third-party capital comes from pension funds and insurance companies in Europe and sovereign wealth funds from the Middle East and Asia. Less than 10 percent of its capital comes from the US.

PERE also understands that Azora Exan plans to launch multiple sector-specific funds in the US, including potential vehicles targeting the residential, hospitality and logistics sectors. Plans are to begin fundraising by year-end.

This follows a similar sector-focused fundraising approach that Azora has adopted in Europe. Last month, the firm held a final close for its latest pan-European hospitality fund, Azora European Hotel & Lodging, gathering €815 million in total commitments against an original €600 million target. Azora also previously raised a €750 million Spanish residential vehicle with CBRE Global Investment Partners and Madison International Realty in 2018.