Hines has closed fundraising for its most recent value-added office vehicle. According to an announcement, Hines US Office Value Added Venture III has been capitalised with $210 million of equity from a single institutional investor and Hines principals. A spokeswoman for the Houston-based private real estate firm declined to disclose the identity of the investor.
Senior managing director and fund manager David Congdon said in a statement that the vehicle’s strategy is to partner with local real estate teams that have long track records of buying, developing, leasing and operating office projects in key US markets. With leverage, the vehicle will have more than $600 million of buying power in the office sector.
“We see an increasing pipeline of opportunities where both capital and diverse operating expertise are needed to realize the full potential of an office property,” added Congdon. “Stabilising or improving fundamentals across many markets make this an appropriate time to capitalise on leasing-related events that create higher, more stable income profiles.”
Hines US Office Value Added Venture III is the third vehicle from Hines to follow a strategy of seeking value-added US investments. The two predecessor funds were the Hines US Office Value Added Fund and the Hines US Office Value Added Fund II, which together have invested $1.1 billion of equity into 18 different assets. The first fund has realized seven of its nine investments, while Fund II continues to execute business plans on its nine investments.
The spokeswoman told PERE that the difference between its latest vehicle and the previous two is that Venture III was capitalised by a single investor, whereas the prior ones were both commingled funds. However, since Venture III is discretionary, it is not considered a separate account, she noted.