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Normandy Partners returns to fundraising trail

The firm is seeking to raise up to $400 million for its latest value-add fund, which focuses on office assets.

Normandy Real Estate Partners, a Morristown, New Jersey-based private equity real estate firm, has started marketing its latest fund, PERE has learned.

The firm, which declined to comment, is seeking to raise between $350 million and $400 million for Normandy Real Estate Fund IV. Normandy is seeking an 18 percent gross net internal rate of return (IRR) and 14 percent net IRR. The firm plans to deploy capital from the fund using the same strategy as earlier funds, focusing on transit-oriented central business district locations in New York City, Washington DC and Boston.

To date, Normandy has made one purchase with capital from the fund, buying a six-story New York office building earlier this month for about $100 million, according to local media. The off-market deal at 799 Broadway in Greenwich Village will likely be renovated to expand the building, keeping tenants on short-term leases, or the firm will do a ground-up, build-to-suit corporate headquarters.

The firm has corralled about $125 million of capital, solely from previous investors, and has just begun to market the vehicle to new limited partners. Investors in the latest fund include the Tennessee Consolidated Retirement System, which allocated $40 million, according to PERE Research & Analytics. The pension system allocated $25 million to Normandy Real Estate Fund III, which closed in March 2014 on $350 million. The vehicle is now fully invested, PERE understands.

Normandy was founded in 2002 and has $1.4 billion of assets under management.