Brookwood targets $300m for gas stations

With its latest fund, the Beverly, Massachusetts-based firm is focusing on a very different real estate strategy than its previous vehicle.

Brookwood Financial Partners is focusing on an unusual investment strategy through its latest fund: gas stations and convenience stores.

The Beverly, Massachusetts-based private equity real estate firm closed on about $15 million of commitments last month for BW Gas & Convenience Fund. PERE has learned that Brookwood is targeting a $300 million fundraise for the vehicle, drawing from institutional investors, with a 20 percent net internal rate of return.

The firm declined to comment, but a press release said Brookwood plans to buy, renovate and operate between 600 and 1,000 gas stations and convenience stores throughout the country. The firm made its first purchase using capital from the fund in the middle of December, buying a 10-store gas station and convenience store portfolio in western Iowa. Brookwood plans to invest $1 million in renovations to selected stores, according to a press release.

“A significant focus of our strategy is to create an initial platform within each region, acquire additional stores to achieve economies of scale and add value to the portfolio by improving both the real estate and in-store margins,” said Mark Daniels, Brookwood’s director of alternative real estate acquisitions, in a statement last month.

In June, Brookwood hired Brian Trout as senior vice president of operations for BW Gas & Convenience. Trout joined the firm after working as an executive for southeastern convenience store chain The Pantry and, prior to that, 7-Eleven.

Brookwood has previously invested in more mainstream property types. The firm finished fundraising last year for Brookwood US Real Estate Fund, a $175 million fund with an additional $150 million in a sidecar vehicle. The fund was launched in 2013 with a focus on suburban office.