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KTR Capital collects $1.2 billion for third fund

The New York-based private equity real estate firm’s latest capital raise far exceeded its initial target, and is equal in size to its previous two funds combined.


KTR Capital Partners has held a final close on its third real estate fund, KTR Industrial Fund III (KTR III), raising a total of $1.2 billion in capital, significantly above its original $750 million target. 

Among the fund's investors were the Kansas Public Employees Retirement System, which committed $40 million in July 2012; Ohio Bureau of Workers’ Compensation, which committed $50 million in January; and the Employees Retirement System of Texas, which agreed to invest $100 million earlier this year, according to documents from those pension plans. Other limited partners included public and corporate pension plans, foundations, endowments and other institutional investors, it said today.

The firm launched the vehicle in the second quarter of 2012, and held an initial close of $193.8 million last August, according to a filing with the US Securities and Exchange Commission. The total capital raise for KTR III matches the firm’s previous two fundraisings combined. KTR’s debut fund, Keystone Industrial Fund, closed on $500 million in capital in March 2006, while the successor vehicle, KTR Industrial Fund II, held a final close of $700 million in December 2008.

KTR III will pursue the previous funds’ investment strategy of acquiring, developing, and operating industrial properties in North America. The value-add fund will target investments in single-property and portfolio deals, as well as development projects on a build-to-suit and speculative basis, but a portion of its capital also will be deployed through debt-related investments. Approximately one-third of the equity in KTR III has been committed to date.

“We have been fortunate to have strong support from a core group of partners throughout our first three funds,” said Jeff Kelter, KTR’s chief executive, in a statement. That support has in turn helped us to attract a great group of new investors that we hope will be with us for a long time to come.”

KTR was formed in 2004, after Keystone Property Trust, a publicly-traded industrial REIT, was taken private for $1.6 billion. To date, the firm has closed on 117 transactions ranging from $3 million to $300 million in, with an average transaction size of $35 million.

Park Hill Real Estate Group served as the placement agent for KTR III, while Seward & Kissel acted as legal advisor for the fund.