Minneapolis-based alternative investment manager CarVal Investors has contributed US and Canadian commercial real estate assets on behalf of two of its funds towards the successful initial public offering of Agellan Commercial REIT. The transaction makes CarVal the largest shareholder of the newly-formed Canadian real estate investment trust.
A spokeswoman for CarVal told PERE that the alternatives manager contributed nine assets comprising 23 properties and totaling approximately 4.2 million square feet of industrial and office space in the US and Canada. These assets were provided on behalf of two of the firm’s commingled funds, North American Real Estate Partners I and II, both of which currently are closed.
The total transaction value was approximately $421 million, encompassing $230 million in US assets and $191 million in Canadian assets. CarVal was unable to disclose details regarding the remaining holdings of the funds that contributed assets to the REIT.
Agellan Commercial REIT completed its IPO of 13.46 million shares last month at a price of $10 per share for gross proceeds of approximately $134.6 million. A report from Canadian Private Equity reveals that CarVal now holds an approximate 26.5 percent interest in the REIT.
Robert Perry, senior managing director at CarVal and head of its North American Real Estate business, will be a member of the board of the newly-formed REIT. Perry joined CarVal in 1997 and has led equity and debt strategies in both private and public markets across all major US and Canadian locations.
“Our participation in this successful Canadian IPO supports CarVal Investors’ strategy to broaden exposure to both private and public markets across our real estate business,” said Perry in a statement. “As a major unitholder in the REIT, CarVal Investors contributed a sizable pool of high-quality assets to the platform, and we are pleased to continue our strong relationship with Agellan to support this venture going forward.”
CarVal invests in real estate assets in the US and Canada through its funds under management. In October, the firm closed its latest vehicle, CVI Real Estate Value Fund III, with $205 million of commitments. Through that fund, CarVal will invest in value-add commercial real estate in North America. The firm is planning to launch a new fund later this year.
Formed in 1987, CarVal Investors focuses on distressed and credit-intensive assets and market inefficiencies and has been managing investments in North American real estate since 1991. The firm currently has approximately $8 billion in assets under management in both credit and real estate strategies.