ING Clarion Partners has closed its latest value-added fund, Clarion Development Ventures III, on $202 million.
The US arm of ING Real Estate, said it would invest the fund over the next three years in all property sectors, including hotels, and even look at land acquisitions and equity investments with distressed developers.
ING’s predecessor fund, the Clarion Development Ventures II opportunistic vehicle, closed in 2006 on $205 million. According to proprietary data from PERE magazine, ING Clarion was targeting $350 million for CDV III.
Doug Bowen, director and CDV III’s portfolio manager, said the latest value-added fund was hoping to exit into a growing market: “We think this commingled fund is timed well for where the marketplace is sitting now.”
The fund, which had commitments from seven institutional investors, is targeting IRRs of between 16 and 18 percent, with investment sizes expected to be between $5 million and $35 million. It has one asset to date, a 104,000-square-foot office development in Redmond, Washington, in which ING Clarion invested $12 million.
Bowen said CDV III would also consider land investments from distressed developers, saying: “We may take a look at buying some land held by distress owners. Another possibility is becoming a new equity partner in an existing partnership.”