JCR pivots to value-add strategy

The Denver-based firm is expanding beyond its opportunistic fund series by launching a $130m value-added fund.

JCR Capital has entered the value-added space after raising three opportunistic vehicles, PERE has learned.

The Denver-based real estate fund manager launched the vehicle, JCR Capital Income Plus Fund IV, with an eye toward both investor demand for lower-return vehicles and more market opportunity in non-opportunistic deals.

JCR is seeking to raise $130 million for the vehicle, which has a $200 million hard-cap. Fund IV has a two-year investment period and a four-year life, with no capital recycling so that investors’ capital is not locked up long-term. Similar to the opportunistic vehicles, the firm will invest Fund IV’s capital across property types, but with a focus on assets that have immediate cashflow.

“We’re doing it as a very tactical fund, which means we think it’s the right strategy for the right time,” co-founder Jay Rollins told PERE. “We’re raising a smaller fund than Fund III. Most people don’t do that, but that’s intentional on our part. We think the investment community is a little nervous… so we pivoted into a smaller, more value-added, more cash-flowing, shorter duration fund that will appease a lot of the concerns that are out there.”

The firm is targeting a 12 percent net internal rate of return for the vehicle.

JCR closed JCR Commercial Real Estate Finance Fund III, its latest opportunistic vehicle, in January 2016 on $330 million, PERE previously reported. The firm has a 16 percent net IRR target for Fund III, which is still being invested. Investors in Fund III included public pension funds, foundations, insurance companies, endowments, foundations, funds of funds and family offices, and Fund IV is expected to have a similar LP base.

Perth Advisors is the placement agent for the fund series.

JCR also manages a bridge loan platform, which Rollins said returns in the low single digits.

In total, the firm oversees about $700 million in assets.