No rest for Praedium

After closing its sixth fund, The PraediumGroup has been finding plenty of opportunities - and exits.

It has been a busy month for New York-based private equity real estate firm The Praedium Group. In recent weeks, the firm has acquired two office properties, a multi-family complex and a retail development, while selling off a New England office property. In late August, the firm also announced that it had closed its sixth fund on $700 million (€572 million), after setting out with a $500 million target.

On the deal front, Praedium acquired two office properties alongside Portland-based real estate merchant bank ScanlanKemperBard (SKB): the AmberGlen Business Center in Hillsboro, Oregon, for $54.8 million, and the Phoenix Corporate Center in Phoenix, Arizona for $49.3 million. AmberGlen is the largest business center in Oregon, with eight buildings on 32 acres, while the Phoenix complex is an eightbuilding, 440,653-square foot campus.

The firm also teamed up with SKB to purchase the Mountain Gate Shopping Center in Simi Valley, California for $39.6 million. Built in the mid-1960s, the 292,300-square-foot mall was 93 percent leased at the time of purchase. Praediumalso made a multi-family acquisition, buying the Magnolia Grove Apartments in Orlando, Florida for $10.3 million. The apartment complex is comprised of 44 two-story buildings and was 92 percent occupied when acquired.

But Praedium is exiting properties, too. In early September, the firm sold three office buildings in Salem, New Hampshire for $8.2 million, which it had purchased in 2003 with Essex River Ventures, a Boston-based real estate operating company.

Praedium Fund VI, the group's new fund, will concentrate on middle-market properties throughout the United States and Canada that “can be enhanced through focused or creative leasing, management or repositioning,” noted Russell Appel, president of The Praedium Group, in a statement. The firm primarily focuses on assets that are under-performing their peers in the marketplace across property types, typically with an enterprise value between $10 million and $70 million.

Praedium's sixth fund included 36 institutional investors, 90 percent of which had previously invested in Praedium Fund V, which closed on $465 million in 2001.

Praediumitself started as a captive arm of CSFB in 1991. The firm became independent five years ago and has invested in more than $4 billion of real estate investments over the past 14 years. CDP Capital-Real Estate Advisory, an affiliate of Caisse de depot et placement de Quebec, is a major shareholder of Praedium.