Cypress Equities nets $400m for debut fund

The Dallas-based retail investment firm has closed its first institutional offering significantly above its original target.

Cypress Equities Real Estate Investment Management (CEREIM) has wrapped fundraising for its debut real estate fund, Cypress Acquisition Partners Retail Fund (CAPRF), at its hard cap of $400 million, $100 million above its original equity target. The first-time fund manager launched the vehicle, which is focused on acquiring value-added retail real estate, in June 2012.

Limited partners include the New Mexico State Investment Council, which committed $50 million in April 2013, and the Connecticut Retirement Plans and Trust Funds, which earmarked $50 million in May. Other public pension plans, corporate pensions, sovereign wealth funds, endowments, foundations, family offices and funds of funds also pledged capital to the vehicle.

CAPRF is the first institutional fund for CEREIM, the investment management group of Dallas-based Cypress Equities, which develops, operates and manages retail and mixed-use properties throughout the US. CEREIM is made up of a nine-person fund management team led by senior managing director and chief investment officer Todd Minnis and senior managing director Chris Maguire. Prior to CAPRF, Cypress formed a $30 million acquisition fund in 2003 with high-net-worth investors, as well as a $150 million development joint venture with Carlyle.

Cypress Equities, meanwhile, was established in 1995, initially as a retail development platform with a build-to-suit strategy. It is the sister company of retail real estate consulting and brokerage firm SRS Real Estate Partners, which Maguire co-founded with former Dallas Cowboys quarterback Roger Staubach in 1986.

Cypress held a first close for CAPRF in May 2013, raising $195.56 million, according to a filing with the US Securities and Exchange Commission. As of October 2013, PERE reported that the firm had amassed more than $250 million and was anticipated to reach its hard cap by January. However, a June 12 filing showed that the fund had attracted $386.25 million as of that date, with the final close taking place on June 20.

Cypress struck its first deal on behalf of the fund in June 2013, buying the Lloyd Center, a 1.48 million-square-foot shopping center in Portland, Oregon, from Glimcher Realty Trust and The Blackstone Group. To date, it has invested about 42 percent of the fund’s capital in six properties with an aggregate cost of approximately $400 million, including the purchase of Brookwood Village, a 645,900-square-foot shopping mall in Birmingham, Alabama, from MAA Realty in March. CAPRF will focus on the acquisition of multi-tenant retail properties such as power centers, lifestyle centers and grocery- and drugstore-anchored strip centers in the US.

Credit Suisse served as placement agent for the fund, while law firm Greenberg Traurig advised Cypress on the capital raise.