Exeter Property Group has launched its third value-added industrial fund, targeting $675 million in equity commitments. Exeter Industrial Value Fund III is aiming for an unlevered return of 10 percent and a levered net return of 13 to 14 percent.
Exeter’s principal of investor relations and reporting Rayenne Chen told PERE that the fund’s strategy will be essentially the same as that of Exeter Industrial Value Fund II by “taking advantage of the attractive pricing in the sector”. The Plymouth Meeting, Pennsylvania-based real estate investment firm will invest the capital in primary markets throughout the United States in order to build a diverse portfolio of big box assets as well as multi-tenant logistics properties. Exeter will use its hands-on operator team to increase income through leasing up, re-tenanting, developing and renovating the properties.
Chen noted that Fund III has seen “very strong support” from existing Fund II sponsors, with at least two-thirds of the investors from Fund II returning to invest in Fund III thus far. Exeter expects to hold a first close on Fund III within the next few weeks and a final close as soon as May 2014.
Most recently, Fund III has attracted equity commitments from institutional investors like the Ohio Police and Fire Pension Fund, which committed $50 million to the vehicle at its November 20 board meeting, and the San Antonio Fire and Police Pension Fund, which approved a $15 million investment at its September 25 board meeting.
In June 2012, Exeter closed Industrial Value Fund II on $615 million, breaking its initial target of $425 million and its hard cap of $575 million with a flood of last-minute investors. The roster of 27 investors in the fund included the New York State Teachers’ Retirement System, Pennsylvania Public School Employees’ Retirement System, Ford Motors’ corporate pension, Metropolitan Real Estate Equity Management, Morgan Stanley Alternative Investment Partners and German insurer Talanx. To date, Exeter has invested approximately 90 percent of the equity from Fund II. The firm hopes to wrap up investments for Fund II by the end of the year in order to focus on Fund III in 2014.