Cornerstone Real Estate Advisers has held a final close on its eighth value-added real estate fund, Cornerstone Real Estate Fund (CREF) VIII, attracting $546 million in equity commitments. According to a statement issued by the Hartford, Connecticut-based real estate investment management firm, the US-focused commingled vehicle wound up being oversubscribed, closing above its initial target of $400 million.
CREF VIII will target property types and markets that Cornerstone expects to have above-average growth potential as the US economic recovery evolves, with a focus on markets with high concentrations of employment in the technology, energy and healthcare sectors. In addition, the fund will put an emphasis on properties located in the Southeast and Southwest.
“We're targeting investments in markets that we believe will be the fastest-growing in terms of job recovery,” said Thomas Dudeck, CREF VIII’s portfolio manager and Cornerstone's chief of investment strategy, in a statement. He added that this is a strategy the firm has had experience executing in the past.
CREF VIII attracted a mix of more than two dozen domestic and international institutional investors. According to data from PERE Connect, those investors include the Cape Coral General Employees’ Pension Fund, the Illinois Municipal Retirement Fund and the National Pension Service of Korea. The fund, which initially was launched in late 2009, held its first close in March 2011.
The new fund already has completed five acquisitions, with two more pending. Investments on behalf of CREFI VII thus far include the acquisition of 795 Folsom Street in San Francisco, a 187,202-square-foot office building that currently serves as Twitter’s headquarters, for $70.2 million; and the purchase of Citrus Falls apartments, a 273-unit multifamily asset in Tampa, Florida, for $30.3 million. Cornerstone is targeting net returns of 12 percent to 14 percent.