High Street nets $353m for Fund V – Exclusive

The Boston-based private equity real estate firm’s latest capital raise is more than double the size of its last offering.

High Street Realty Company has held a final close on its latest core-plus real estate fund, High Street Real Estate Fund V, raising a total of $353 million.

The fund had a target of $300 million and a hard-cap of $350 million. The capital raise included a $3 million co-investment from High Street.

Fund V attracted capital from insurance companies, public and corporate pension funds, foundations and other institutional investors from the US and Europe. Limited partners in the fund included Maine Public Employees Retirement System, which earmarked $25 million in 2015, and the State of Wisconsin Investment Board, which committed $75 million during the first quarter. The fund’s leverage was capped at 50 percent, a limit that was said to have been established to help attract European investors.

High Street officially launched the fund in July 2015 and held a first close of $23 million in September, according to filings with the Securities and Exchange Commission. Fund V was more than double the size of its predecessor fund, Fund IV, which raised $141 million in 2012, according to PERE data.

The firm declined to comment, but PERE understands that High Street initially raised capital in-house but brought in San Francisco-based advisory and capital raising firm Accord Capital Partners at the end of August as placement agent.

With Fund V, High Street will continue its strategy of acquiring smaller warehouse distribution assets, generally ranging from 50,000 square feet to 350,000 square feet. The properties are typically multi-tenanted by smaller users that need to be closer to urban centers to fulfill last-mile logistics requirements. On behalf of the fund, the firm will target primary distribution markets in the eastern two-thirds of the US, including Chicago, northern New Jersey, central Pennsylvania, Atlanta, Florida and Texas. Fund V will have target gross returns of 12-14 percent.

To date, the firm has acquired 19 assets that in aggregate represent approximately 34 percent of the fund’s total commitments. One of the fund’s early investments was the acquisition of the Tampa Distribution Center, a 955,000-square-foot industrial real estate campus in East Tampa, Florida, from MetLife Real Estate Investors in August 2015.

Since its founding in 2002, High Street has invested more than $660 million of equity and acquired over $1.6 billion of industrial properties in 18 major US markets.