Cantor Fund Management, the St. Petersburg, Florida-based firm, is targeting $100 million for its second opportunistic/value-add fund — Cantor Private Real Estate Income & Growth Fund II.
Cantor will be targeting distressed real estate priced at 30 percent to 60 percent discounts to replacement cost. Typical deals will be at priced between $2 million and $25 million and expected to generate an 8 percent 12 percent cash-on-cash return.
“This next Fund is designed to scale up and accelerate our pace of acquiring the remaining quality over-leveraged commercial real estate leftover from the 2005 to 2008 boom totaling $109 billion, or 8,729 properties,” according to Cantor’s fundraising presentation seen by PERE.
Cantor will follow the same strategy as Fund I, which was launched in 2012. That was an $18 million fund focused on investing in distressed properties in the retail, office, and multifamily sectors in secondary markets in the Southeast, Southwest, and Midwest regions of the US. Cantor completed its final investment for Fund I in January 2015 having invested that capital into nine properties representing a total purchase price of $42 million. The fund is currently producing a 69 percent net IRR, 1.6x multiple, and 89 percent Net Unit Value Increase since inception.
Cantor is managed by Joel Cantor, Glenn Becker and Stephen Collins who have collectively managed investments in 111 real estate assets totaling $3.8 billion during their careers. The principals will put $5 million of their own cash into Fund II which has a fee structure of: a 1.5 percent management fee and 20 percent carry over a 6 percent minimum cumulative annual return paid quarterly.