Northwood collects $500m for third offering

Northwood Investors has closed on $500 million in commitments for the third offering of its opportunistic real estate fund, Northwood Real Estate Partners, and related co-investment vehicles. The New York-based firm, led by John Kukral, now has raised a total of $2.8 billion in capital on behalf of the evergreen fund.

Northwood closed on commitments for the third offering during a 90-day period that ended late last month. One of the limited partners in the most recent offering was the New Jersey Division of Investment, which committed a total of $150 million to the main fund and a related co-investment vehicle in May. The firm’s other investors have included Hatteras Investment Partners, the University of Texas Investment Management and other endowments, foundations, pension plans, trusts, family offices and high-net-worth individuals.

Northwood closed its first capital-raise of $1.25 billion for Northwood Real Estate Partners in August 2007, followed by a second capital-raise of more than $1 billion in September 2011. Northwood declined to comment, but PERE understands that the capital from the first offering has been fully deployed, while a majority of the funds from the second offering also have been invested.

The Northwood fund has a unique ‘evergreen’ structure, where it can hold assets for up to 15 years and re-invest proceeds back into the vehicle. With an evergreen vehicle, the firm is allowed to add capital to the fund once each calendar year, which is distinct from open-ended funds that can accept capital on a more frequent basis. The amount of capital that can be raised during each offering depends on the amount of capital currently available.

The vehicle will pursue opportunistic real estate investments globally, with a particular focus on major metropolitan areas of the US and select markets in Europe. Northwood invests in a range of property types, including hotel, office, retail, residential and industrial, and its investment strategies include value-added repositioning, in-fill development or redevelopment, real estate securities and distressed situations, according to its website.

To date, Northwood has invested or committed to invest approximately $1.8 billion in 23 investments in the US and Europe. Earlier this month, the firm acquired majority ownership interests in a portfolio of hotel properties in Florida from the original developer, Pritam Singh. Northwood Hospitality, an affiliate of the firm, will operate the hotels, which include the Parrot Key Resort and a hotel development site in Key West and Tranquility Bay Beach House Resort in Marathon Key.