Glenmont closes Fund III on $100m

Glenmont Capital Management has closed its third fund raising $100 million in commitments.

The New York-based firm closed Glenmont Real Estate Partners III at the end of December, the firm’s founding partner and managing principal Lawrence Kestin told PERE. The fund is approximately 30 percent invested.

We are already seeing heightened activity in the market place with banks more willing to take the discounts. I’m optimistic that 2010 will be a year in which lenders get realistic about the value of assets. Lawrence Kestin

The vehicle is targeting distressed equity and debt opportunities across the US, although a focus would be given to the multifamily and hospitality sectors, which Kestin added, the firm had historically deployed two-thirds of its capital to.

Last month Glenmont closed on a full service hotel in Orlando for about $8 million after the previous owner, CF Hospitality, went into bankruptcy and the property was taken back by its lender, according to data research firm Real Capital Analytics. Investing $4 million for renovations with joint venture partner Resolution Services, Glenmont has since repositioned the hotel under the Sonesta flag, the first Sonesta in the US.

Founded in 1999 by Kestin, formerly a principal with Colony Capital, and ex-Bankers Trust private equity real estate executive Joseph Smith, Glenmont has raised $130 million in commitments through its two predecessor vehicles, Glenmont Real Estate Partners I and II.

Kestin said hotel opportunities were more “realistically priced” compared to other food groups, adding that he was hopeful 2010 would see greater value realisation from banks than in the past 12 months.

“Hopefully 2010 presents a lot more opportunity” he said. “We are already seeing heightened activity in the market place with banks more willing to take the discounts. I’m optimistic that 2010 will be a year in which lenders get realistic about the value of assets.”

Kestin also picked Florida as a potential “feeding ground” of opportunities for deals. “Lenders are in deeper distress there and are more willing to sell their assets at realistic prices.”