Painting the town orange

Westplan Investors, a Dutch real estate investment firm with offices in Lisse, Holland and Atlanta, Georgia, has raised approximately $24 million (€20 million) for its second blind pool limited partnership fund, Westplan Bridge Equity Fund II.

The fund, which raised most of its capital from Dutch high net worth individuals and is targeting net returns of 20 percent, will invest in residential developments, including apartments, condominiums, condoconversions, townhouses and lot developments. According to Neil Sapra, vice president of US operations, Westplan has historically pursued transactions on a deal-by-deal basis, with the Atlanta office responsible for sourcing the deals and the Dutch office leading the charge on fundraising.

However, given the strength of the current capital markets, Sapra notes that the ability to fund deals in a timely fashion is more critical than ever. “There is just so much capital chasing deals,” he says. “A developer can have a project under contract and need to close in thirty days – that just doesn't allow us to go out and raise capital for each individual deal. We need to be able to pull the trigger.”

Though the firm has traditionally focused on Atlanta and the Southeast given the region's favorable demographic trends, Westplan has been diversifying its outlook as its development partners have grown and expanded into different states. For example, using equity from Fund II, the firm is currently developing a loft apartment building in Phoenix with a longtime Westplan partner.

Another deal from the current fund is the Lofts at Inman Park, a mixed-use office project in downtown Jacksonville, Florida. Westplan and its development partner are converting a portion of the space into loft apartments, while half of the space will be leased to the existing office tenants, primarily “telecom hotels”.

“There are very limited residential units in downtown Jacksonville,” notes Sapra. “And ninety-five percent of the deals we've done have involved some sort of construction or renovation.”

Led by Ewoud Swaak, Westplan was founded in 1994 and established its US presence in 1996. Since then, the firm has completed thirty-eight deals in the US using approximately $110 million of equity, including Westplan Bridge Equity, which closed on $10.5 million in 2001.

Although Westplan was initially attracted to the Southeast because of its aforementioned demographic attributes, Sapra notes that there were other considerations as well. “When they started doing business in the US,” he notes, “Atlanta and Orlando were one of the only direct flights available via KLM.”

FUNDS & INVESTORS

CalPERS scores big with real estate
The California Public Employees' Retirement System (CalPERS) reported a 12.7 percent investment return for the year ending June 30, 2005, bringing the pension's market value to $189.8 billion (€155.8 billion). Real estate was the pension's best performing asset class with a 38 percent return, more than double the NCREIF benchmark of 15.5 percent. CalPERS invests largely in the office, retail, apartment and industrial sectors. At the end of the fiscal year, 6 percent of the pension's portfolio was in real estate. The second highest rate of return came from the alternatives program, including private equity and venture capital, which generated a 22.8 percent gain.

OPERS makes $182m in RE commitments
The Ohio Public Employees Retirement System (OPERS) has made four additional commitments to its real estate portfolio, totaling $182 million (€149 million). The fund committed $75 million to the LaSalle Asia Opportunity Fund, $52 million to CBRE Strategic Partners UK Fund II, $30 million to Tri Continental Capital VII and $25 million to Carlyle Realty IV. Following this move, the pension has 11 commitments to the asset class, totaling $887 million. OPERS' senior investment officer said in a statement that the pension is looking for direct investment opportunities in a variety of property types, as well as through core and opportunity funds. The pension fund has total assets worth about $64.5 billion.

Carlyle closes fourth US RE fund
Washington, DC-based private equity firm The Carlyle Group has closed its fourth US real estate fund on $950 million (€780 million), focusing on opportunistic investments in the office, hotel, industrial, retail, residential and senior living sectors. The firm's last fund, Carlyle Realty Partners III, closed in 2002 on $570 million. Investments from that fund averaged $13 million each, with around 58 percent to 60 percent leverage. Carlyle focuses on major US markets like New York City, Southern California and Washington, DC, where the firm has invested $1.3 billion since December 2003. The firm closed its debut fund in 1998 on $471 million, with a follow-up vehicle closing in 1999 on $252 million.

Lexin Capital raises debut vehicle
New York-based private investment firm Lexin Capital has raised $70 million (€57 million) for Lexin AmTrust Real Estate Partners, a fund focusing on single-family residential property. With equity and mezzanine components, the fund is targeting the residential markets in the Southeast, Southwest and mid-Atlantic. Lexin has previously invested across property types, with a number of residential projects in Florida, including a planned community in Palm Beach County and the Griffin Lakes development in Broward County. The firm, which is working with Ohio bank AmTrust Bank, is targeting a net IRR of 20 percent.

Oregon posts a 13.9 percent return
The Oregon Public Employees Retirement Fund (OPERF) posted a 13.9 percent overall return for the fiscal year ending June 30, 2005, bringing the pension's total market value to $49.5 billion (€40.6 billion). Much of the credit for the strong gains goes to the real estate portfolio, which saw a return of 31.6 percent (see page 33). The asset class was only bested by the fund's alternative equity investments, which racked up a 38.8 percent return. The Oregon Investment Council, which oversees OPERF, recently approved a $75 million commitment for Aetos Capital's second Asia vehicle, as well as $100 million for JP Morgan Asia Opportunity Fund II and $200 million for Warburg Pincus Private Equity IX.