A small value-added fund focusing on New York City real estate managed has held a first close. According to a statement by the two real estate firms jointly managing the vehicle, the fund, known as MKRO I, has held a first close with aggregate commitments of $10 million.
Launched in October, MKRO I is a joint venture between New York-based Massey Knakal Realty Services and Stamford, Connecticut-based RiverOak Investment. The venture primarily is targeting high-net-worth investors and family offices, as the size of the fund may preclude larger pension plans from investing. However, pension plans, corporations, foundations and endowments are welcome to invest in the fund, which has a minimum contribution of $250,000. MKRO I is targeting a total fundraise of $50 million, and a final close is anticipated in October 2013.
Through the fund, the joint venture is pursuing small- to mid-sized value-added investment opportunities in New York where it can provide gap equity, contributing between $2 million and $7 million into each deal in which it invests. James Nelson, partner at Massey Knakal, said in a statement: “We believe tremendous opportunities exist for the fund due to the lack of organised capital for transactions with capitalisations of $25 million or less.”
A spokeswoman for Massey Knakal told PERE that MKRO I is targeting multifamily, retail, for-sale residential and office properties in four of New York’s five boroughs: Manhattan, Brooklyn, Queens and the Bronx. MKRO I will not invest in Staten Island.
Massey Knakal is a diversified advisory and transactional firm providing investment sales, retail leasing and financing services for its clients. The firm focuses exclusively on properties in the New York City metropolitan area and, since 1988, has transacted approximately 4,200 assignments with an aggregate value of more than $15 billion.
Founded in 1999, RiverOak Investment is an investment management firm focused on the acquisition of value-added commercial real estate throughout the Northeast corridor. The firm seeks to create significant returns for its investors through strategic value-added acquisition, development, capitalisation, repositioning and management of real estate assets.