LaSalle Investment Management is launching its fourth Canadian real estate fund, according to the Chicago-based real estate investment manager.
The value-added fund, LaSalle Canadian Income & Growth (CIG) Fund IV, is seeking C$250 million (€190.1 million; $246.5 million) in equity from investors. Although the commingled vehicle may be open to US investors in the future, LaSalle anticipates the bulk of the fund to be committed by Canadian LPs, from which it is seeking minimum commitments of C$5 million. A first close for CIG IV is expected in the third quarter, with a final close estimated 12 months thereafter.
CIG IV is targeting non-core office, retail, warehouse and multifamily properties with stable income and upside potential. The fund will seek investments across Canada, with a focus on the country’s top six metropolitan areas of Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal.
Zelick Altman, managing director and chief executive officer of LaSalle’s Canadian operations, told PERE that LaSalle is looking to add value to the properties it targets “through active asset management” and enhancements to allow the properties to achieve LEED certification. LaSalle is targeting a net return of 10 percent or higher for the fund, which has a three-year investment period and a five-year holding period.
“We’ve seen the Canadian economy strengthen following the economic downturn, with solid real estate fundamentals limiting downside exposure,” Altman said. “Canada’s real estate market is active and robust, with financing widely and readily available.”
The previous vehicle in the series, CIG III, closed on C$228 million in equity in 2009. Typically, there’s a three-year gap between funds, but the global financial crisis caused an additional delay of one year between CIG III and IV, Altman noted.
Although LaSalle hasn’t made any investments on behalf of the fund yet, it anticipates it will be looking at opportunities within one month of the first closing. “The Canadian market is pretty healthy, so it’s hard to tie anything up for an extended period of time,” Altman said.