DRA set to close $1b value-added US fund

The New York-based real estate investment firm's DRA Growth and Income Fund VII currently has $662m in commitments and is expecting a final close in September.

New York-based real estate investment firm DRA Advisors is set to close its seventh value-added US real estate fund at the end of this quarter, according to sources familiar with the situation. The $1 billion vehicle, DRA Growth and Income Fund VII, has $662 million in commitments. 

The firm expects the fund to hold a final close in late September, with an interim closing sometime in August. Documents filed with the US Securities and Exchange Commission show that Fund VII, which DRA launched in March, has already had three closings: one in May and two in June. 

One source told PERE that Fund VII is targeting “existing properties that have good cash flows”, such as office properties, shopping centres, apartments, multifamily properties and to a lesser degree industrial distribution properties. Like its previous six fundraises, it is seeking assets throughout the US, with emphasis on the coastal markets. 

“About 85 percent of the capital is sourced from existing investors,” the source added. The fund is targeting an internal rate of return of 12 to 15 percent for investors.

The fund's first investment was in Orchards at Collierville, a 226-unit apartment community at 400 Orchard Circle West in Collierville, Tennessee. DRA bought the asset in late June through a joint venture with Memphis-based Fogelman Venture Partners for $15.7 million.

The vehicle follows DRA's Fund VI, which raised $1.25 billion four years earlier. Its first vehicle, DRA Opportunity Fund, was launched in 1995 and raised $189 million in equity.