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Belay to invest $150m in new JV

Belay Investment Group is teaming up with a boutique real estate firm to invest up to $150 million in multifamily and retail real estate in California and Texas, the firms said Wednesday.

Belay Investment Group is teaming up with a boutique real estate firm to invest up to $150 million in multifamily and retail real estate in California and Texas, the firms said Wednesday.

The joint venture with Arc Capital Partners, called ArcWest Partners, plans to buy and reposition value-add and opportunistic multifamily and retail properties in submarkets experiencing strong millennial demand growth, according to the firms’ statement. This is the first time the Los Angeles-based groups have worked together, Belay’s managing principal, Suzanne West, told PERE.

The partnership also marks the first capital deployment from Belay’s second fund, Belay Partnership Ventures II. In March, Belay held a first close for the vehicle, lining up $200 million in equity from the California State Teachers’ Retirement System (CalSTRS). Belay is targeting $500 million for the fund with a net internal rate of return goal of between 12 percent and 13 percent, PERE previously reported.

“CalSTRS has been a long term supporter of emerging managers,” said Mike DiRé, CalSTRS’ director of real estate, in a statement Wednesday. “As the lead investor in the fund, we are pleased to be providing a path of growth for Arc Capital Partners and look forward to sharing in the success of ArcWest Partners.”

Belay’s first vehicle, American Value Partners Fund I, closed in 2007 with $400 million. Investors in the debut fund included California Public Employees’ Retirement System, CalSTRS and New York City Employees’ Retirement System, all of which allocated $100 million, and New Mexico State Investment Council and North Carolina State Treasury, which each committed $50 million, according to PERE research.

Arc Capital Partners was founded in 2013 by Quincy Allen and Neville Rhone, two former executives at Los Angeles-based real estate investment firm Canyon Capital Realty Advisors. Allen and Rhone’s firm invests in western US multifamily and retail real estate.

Belay had about $315 million in assets under management as of the end of the first quarter.