The Hungerford Properties Western Canada Opportunities Fund (HPWC) has held its final close, raising C$120 million ($116 million; €89 million) in committed capital. The debut opportunistic fund from Vancouver-based real estate investment firm Hungerford Properties targets value-added properties in Vancouver, Edmonton and Calgary.
The fund’s capital primarily comes from global institutional investors, such as pension plans and foundations, as well as from family offices and high-net-worth individuals. Andrew Hungerford, partner at Hungerford Properties, told PERE that this fund represents Hungerford Properties’ first foray into institutional capital-raising and he is pleased with the success. He looks forward to launching the firm's next fund towards the end of 2014.
The fund’s objective is to invest in a diversified portfolio of moderately leveraged commercial and residential properties, focusing on refurbishment and redevelopment opportunities. Specifically, HPWC is interested in “gentrifying neighborhoods as well as neighborhoods undergoing transportation infrastructure upgrades,” said Hungerford. The firm is aiming for a gross internal rate of return of approximately 20 percent.
Thus far, the fund has allocated one-third, or C$40 million, of its committed capital and has achieved one realization on the disposition and build-to-suit development of Albion Fisheries, a Vancouver food processing and distributing facility. The fund has a three-year investment plan for the remaining capital, but Hungerford expects to finish investing within the next two years. With leverage, the vehicle anticipates acquiring a combined portfolio of C$400 million of income-generating and development properties.
HPWC’s most recent transaction occurred last week with the acquisition of the 761,000-square-foot Haworth office furniture factory in Calgary. Though the purchase price has not been disclosed, the 45-acre property was assessed at C$60 million, according to data provider Real Capital Analytics. Hungerford plans to transform the single-tenant manufacturing space into a multi-tenanted building with former owner Haworth as the first tenant.