Singerman Real Estate (SRE), a Chicago-based opportunistic real estate investment firm, has completed fundraising for its second property fund, SRE Opportunity Fund II. Singerman closed the fund at its hard cap of $275 million after approximately six months in market.
The firm launched the fund with an initial target of $250 million in September and held a first closing two months later. Limited partners – which included endowments, foundations, pension plans, money managers, family offices and high-net-worth individuals – primarily were existing investors that had previously committed to the firm's debut vehicle, Singerman Real Estate Opportunity Fund, which raised more than $118 million in commitments in September 2013. With Fund II, however, the LPs increased their commitment sizes by an average of 50 percent.
SRE is targeting an 18 percent net return and 1.75x multiple for Fund II. It typically pursues complex and value oriented real estate investments, both in operating assets and loans, and invests across all property types. The firm has a national footprint, investing from Florida to Oregon. Typical deal sizes generally require $7 million to $20 million of equity, but SRE also has the capacity to do much larger transactions through co-investments.
“Our focus is on finding discreet assets where there's dislocation in the marketplace, and when we generate value without assuming the market has significant fundamental improvement,” said Seth Singerman, the firm's founder and managing principal.
Among the firm's deals was the 2012 acquisition of the Westmoreland Building, a 100,000-square-foot office building in Skokie, Illinois through a deed-in-lieu of foreclosure. SRE subsequently sold the building to a Chicago-based investor last year. The firm now has four properties under contract, totaling $100 million, on behalf of Fund II.
Singerman, who founded in his namesake firm in 2010, formerly was a managing director at GEM Realty Capital, where he had senior investment responsibilities for its direct real estate and public real estate securities platforms. SRE currently has nine employees and more than $400 million of assets under management.
Chicago-based Incubation Capital Partners acted as placement agent on the capital raise.