EXCLUSIVE: Sterling raises $101m for third RE fund

Sterling Organization is raising its first core-plus real estate fund, Sterling United Properties I, according to a person familiar with the fund. The firm is said to have held a first close of $101 million on the fund, which has an equity goal of $150 million, the source said. Sterling declined to comment.

The firm’s core/stabilized real estate strategy will be focused on grocery-anchored shopping centers that are located in primary US markets and are generating stable, predictable cash flow, according to Sterling’s website. Deals would range from $10 million to $250 million and involve individual assets or portfolios.

The launch of Sterling United Properties I follows the final close of its second real estate vehicle, Sterling Value Add Partners II, which Sterling wrapped up late last year on total equity commitments of $311 million, exceeding an original target of $275 million. The firm held a first close on that fund in June 2013, according to a filing with the US Securities and Exchange Commission.

Through the value-add vehicle, which will have $1 billion of buying power, Sterling will be pursuing investments in retail properties that are situated in major US markets, and are characterized by significant income growth, below market rents and redevelopment opportunities. Transaction sizes would range from $10 million to $1 billion and entail individual assets or portfolios. Earlier this month, Sterling announced the purchase of Stones River Mall, 594,688-square-foot enclosed regional mall in the Nashville metropolitan area, on behalf of Sterling Value Add Partners II.

Sterling was founded in 2007 by Brian Kosoy and Greg Moross, following the privatization of Sterling Centrecorp, a public traded Canadian company where the two executives had part of the senior management and significant shareholders. The firm closed its debut institutional fund, Sterling Value Add Partners, on a total of $138 million in commitments in December 2012.