Two Chicago firms that run a series of industrial real estate funds are doubling their target size for their latest value-add vehicle, PERE has learned.
Venture One Real Estate and investment advisor Kovitz Investment Group are preparing to market VK Industrial IV in the fall with a $100 million target. The firms’ predecessor vehicle, which launched in late 2014 and closed in 2015 on $50 million, is still in its investment period.
The firms declined to comment on fundraising, but PERE understands that the duo is still soliciting capital for the fund from retail investors and high net worth individuals, while also seeking institutional investment for the first time. The firms are targeting mid-teens returns for the vehicle, with a focus on investments around Chicago and the surrounding area.
Venture One and Kovitz started the fund series in 2010 with a $25 million vehicle targeting investments that were considered too small for institutional investors. One of the firms’ recent publicly disclosed acquisitions from VK Industrial III was the March purchase of the Yorkbrook Business Park in Lombard, Illinois (pictured), a portfolio comprising 12 industrial properties and six flexible office properties, according to Venture One’s website. The firms bought the property for $36 million from TA Realty, according to real estate data provider Real Capital Analytics.
Matt Goode, a principal at Venture One, said the combination of a booming e-commerce industry driving demand and foreign investors’ increasing interest in buying quality assets has driven growth in the space. In 2010, by comparison, he said there was no shortage of deals but the leasing landscape was much worse, and selling opportunities were unclear.
“We’re seeing today that it’s easier to underwrite the leasing and exit strategy, and we still do not have significant competition at a smaller deal size,” Goode told PERE.
Venture One, founded in 1999, also has a separate build-to-suit development business with more than 1,100 acres of land. The firm has worked with clients, including 3M and Target, to build class A warehouses and manufacturing facilities, Goode said. Venture One owns a total of over 5.3 million square feet of land, according to its website.
Kovitz, founded in 2003, manages about $2.8 billion of assets, according to its website.