Basis in $180m initial close for debut RE fund – Exclusive

Basis Investment Group has held a $180 million first close on its debut real estate fund against a $400 million target, PERE has learned.

The seed investor for BIG Real Estate Fund I is understood to be alternative asset manager GCM Grosvenor. Prior to the fund’s launch, Basis and GCM Grosvenor formed a joint venture to buy assets that ultimately became the seed portfolio.

State Universities Retirement System of Illinois agreed to invest the lesser of $30 million or 10 percent of the aggregate commitments to the fund in September. The New York State Common Retirement Fund also earmarked $25 million to BIG Real Estate Fund I on November 2 through NYSCRF Frontier Mach II, its emerging manager program with Artemis Real Estate Partners, according to a spokesman. Meanwhile, Illinois Municipal Retirement Fund pledged $5 million to the fund through its own emerging program with Artemis.

Basis has deployed $1 billion in equity and closed $2.7 billion across 275 transactions in 43 states since inception, according to a May investment committee summary from the Chicago Teachers’ Pension Fund, which is said to be considering a commitment to the fund. Those investments were done through a combination of separate accounts and joint ventures. Of the $2.7 billion, $661.2 million were in the strategies that the firm is targeting for the fund as of year-end 2016. The fund has a gross return target of 21 percent and a 1.8x multiple, CTPF said.

Basis is a commercial real estate investment manager primarily focused on debt and structured equity strategies. The firm originates and acquires commercial real estate debt investments across the capital stack of stabilized, transitional and development assets in the US, including fixed-rate CMBS loans and B pieces; bridge loans; mezzanine financing; preferred equity; structured equity/joint venture equity; and distressed debt. Basis targets investments in the multifamily, retail, office, industrial, hotel, senior housing, self-storage and manufactured housing sectors.

Last August, the firm launched the Emerging Developer Loan Fund in partnership with the New York City Economic Development Corporation. The fund, which includes a $10 million commitment from NYEDC, provides low-interest loans to New York City-based mixed-income and mixed-use residential, industrial and commercial real estate projects with development costs under $30 million. BIG Real Estate Fund I is the firm’s first commingled real estate vehicle.

Basis was co-founded in 2009 by chief executive Tammy Jones in partnership with New York-based real estate company JEMB Realty Corporation. Jones previously led CWCapital’s fixed and floating rate capital markets lending division from 2004 to 2009. Basis is a 100 percent minority- and woman-owned business.