DivcoWest founder David Taran is partnering with former pension fund manager turned entrepreneur, Mark Skeen, to open Sunstar Capital, a private equity real estate shop in San Jose, California.
The co-founders have a long history of real estate business from both institutional investor and asset management sides. Taran founded real estate investment firm DivcoWest, which he left in April 2006, and then Page Mill Properties, which folded in the global financial crisis. Skeen, a former firefighter, spent a decade chairing the San Jose Police and Fire pension system, which has a real estate portfolio of over $200 million. Skeen later joined Taran at Page Mill, where he was responsible for sourcing investments from institutional investors.
At their latest venture, the men are in preliminary talks with investors for Sunstar’s first fund with a $100 million target, including an undisclosed co-investment sidecar.
Sunstar plans to invest in West Coast markets supported by the technology industry. Potential investment areas include Oakland, California and other areas with access to public transit and large investments from tech companies, Loren Skeen, the firm’s spokeswoman, told PERE. The firm has a net internal rate of return target of 14 percent for the fund. Sunstar plans to invest in high-rise office buildings that need repositioning.
“Our brokers are lining up some fantastic properties in our target markets,” Skeen said. “We're excited to get back in the market with this fund.”
Sunstar is soliciting capital from both domestic and overseas investors, focusing on high net worth individuals and pension funds. The firm is not using a placement agent.
“We've done very well in the past on office buildings in the San Francisco Bay Area and in Southern California, and we expect to return to those markets,” Taran said.