CenterSquare Investment Management has launched its third private equity real estate fund, CenterSquare Value-Added Fund III. The vehicle, which has a $500 million equity goal, will invest in middle-market, transitional properties in the US, particularly in the office, multifamily, retail, industrial, parking and hospitality sectors.
CenterSquare, which is the real estate investment business of financial services company BNY Mellon, is anticipated to hold a first close for Fund III during the second quarter of this year and a final close a year later. On behalf the fund, the firm plans to purchase properties with total capitalizations of $25 million to $75 million.
The vehicle will pursue a value-add investment strategy, with a focus on acquisitions and improvements of assets that require upgrades and changes in their capital structures. “We believe that a middle market, value-add real estate strategy represents the most attractive space in the market for creating value and reducing risk,” said P.J. Yeatman, head of private real estate for CenterSquare, in a statement. “Fund III will be an acquirer of transition and a seller of stability.”
Fund III marks CenterSquare’s first private real estate fundraising since its rebranding last year. Formerly known as Urdang Capital Management, the investment manager previously raised $267 million for Urdang Value-Added Fund I in 2003 and $463 million for Urdang Value-Added Fund II in 2007. Law firm Clifford Chance is advising CenterSquare on the new fund.
The rebranding, which occurred last July, was the culmination of a series of changes that had been taking place at the firm for the past few years, including the naming of a new chief executive officer in June 2012 and the creation of a new head of private real estate in January 2013. The latter role, which Yeatman assumed, previously was handled by the firm’s former chairman, Richard Ferst, who retired in December.
CenterSquare, which was founded in 1987 by Scott Urdang, managed approximately $1.8 billion in debt and private equity real estate investments as of December 31. Additionally, it oversaw $6 billion in public real estate securities.