Vancouver-based private equity firm Second City Capital Partners has launched its second US-focused real estate opportunity fund, targeting $200 million in equity from both US and Canadian investors. The firm expects to hold a first close in the second quarter and a second close six to 12 months afterwards. The firm is targeting a 16 percent net return for the vehicle.
Second City Real Estate II will seek to acquire income-producing office and multifamily properties and reposition these assets to generate returns. It will target acquisitions in 12 markets with strong economic fundamentals and potential for long-term growth, which Second City has identified as Seattle, Portland, Salt Lake City, Denver, Phoenix, Orlando, Tampa and Boise, along with the four largest markets in Texas – Houston, Dallas, Austin and San Antonio. The firm currently owns property in nine of these target markets, according to vice president of investor relations Matt Carlson.
“We have acquired more than $400 million of investments to date and our investors are very pleased by our acquisitions,” Carlson told PERE. “This has resulted in strong interest from our existing investors, as well as a high degree of interest from new investors who want to target similar transactions.”
Second City’s first fund, Second City Real Estate, garnered $102 million in commitments from US and Canadian investors. The fund, which closed in 2012, has fully invested its capital in 17 properties.
Second City is led by its chairman, Canadian billionaire Sam Belzberg. Belzberg founded real estate investment and development firm Balfour Holdings, which it sold to The Blackstone Group in 1997. Belzberg also heads private real estate and equity investments company Gibralt Capital.