Hutensky in first buy from latest fund – Exclusive

Hutensky Capital Partners has deployed the first chunk of capital from its latest fund in a Denver, Colorado-area acquisition, PERE has learned.

The Hartford, Connecticut-based private equity real estate firm purchased the Marketplace at Northglenn, a 439,000 square foot retail center in the north Denver suburbs, for $48 million, firm president Brad Hutensky said. Major tenants include PetSmart, Bed Bath & Beyond and Office Depot.

Despite the overall weakness in the US retail market, there are still pockets of strength, says Hutensky. For example, Ross Dress for Less, a national clothing retailer and Marketplace tenant, has announced plans to add 90 stores across the US in 2017.

Capital for the Marketplace deal came from HCP’s third value-added fund, Hutensky Capital Partners Retail Renewal Fund, which launched this summer with a $200 million target. The firm declined to comment on fundraising.

HCP RRF corralled $51 million of capital in a June first closing, according to a filing with the Securities and Exchange Commission.

HCP’s investor base includes foundations, endowments, small pension funds and funds of funds. PERE understands that two of the firm’s existing investors – one endowment and one fund of funds – committed to HCP RRF.

HCP’s retail investments include joint ventures for new development and repositioning of shopping centers; outright purchase of shopping centers; and debt secured by retail assets.

The firm is targeting a 15 percent net internal rate of return for HCP RRF. The value-added fund series is understood to have returned above that target to date.

Founded in 1979, retail-focused HCP manages $400 million.

Hutensky is raising and investing capital at a time when retail real estate deal volume has fallen to its lowest level since 2012, according to data provider Real Capital Analytics. August saw $3.9 billion in transactions, down 18 percent year-on-year and the same volume as August 2012.