CBRE Global Investors, the Los Angeles-based real estate giant, has made serious headway in its efforts to raise $750 million for its latest US value-added property fund, according to a document by the San Diego City Employees' Retirement System (SDCERS) published last week.
In the document, in which SDCERS recommends a $20 million commitment, the pension system stated that CBRE has closed on $350 million of equity from six investors for the CBRE Strategic Partners US Value VI fund. The document also said $295 million had been approved for the fund and that $450 million was in due diligence.
Through the vehicle, CBRE intends to “purchase, reposition and sell institutional quality properties in select US markets”. A final closing is intended for December this year.
While the fund has been in capital raising mode, CBRE has already put some of its capital to work, completing investments in six properties. These include one office property each in Atlanta and Los Angeles as well as two multifamily assets each in Denver and Baltimore. All told, the total value of these six is $536 million.
The investments of the fund are expected to yeild a return of 14 percent to 16 percent IRR.
Separately, in August 2011, CBRE Global Investors made its final purchase on behalf of its prior fund, CBRE Strategic Partners US Value 5, in the acquisition of 2603 Augusta Drive, a 16-storey, Class A office building in Houston for $24 million. Fund V closed on $1.3 billion in equity commitments in 2008.
CBRE Global Investors declined to comment on the fund.