After a somewhat prolonged fundraising period, Parmenter Realty Partners has closed its fourth and latest US value-added real estate fund, which gives the Miami-based firm roughly $1 billion of buying power.
According to chief operating officer Andrew Weiss, Parmenter Realty Partners Fund IV closed on $253 million in commitments and $51 million in co-investment and joint venture capital. With leverage, the $304 million raised gives Parmenter approximately $1 billion of buying power.
Through Fund IV, Parmenter will seek distressed office properties in the southern half of the US, excluding Southern California. The firm then will work to physically enhance the acquired properties and return them to Class A status. “We are targeting returns for Fund IV in excess of 15 percent net to our investors,” Weiss told PERE in an email.
Already, the fund is nearly 40 percent invested. Investments on behalf of Fund IV thus far include The Lenox Building in Atlanta, 2200 West Loop South in Houston, Brookhollow Plaza I-III in Houston and Fifth Third Center in Charlotte.
Initially launched in 2010, Fund IV held a first close of approximately $100 million in March 2011 with commitments from a mix of large institutions, university endowments, fund of funds and select high-net-worth investors. As PERE previously reported, Parmenter originally was targeting a first close in September 2010, but a tough fundraising environment delayed that by two quarters.
Shortly after Fund IV’s first close, Darryl Parmenter, president and chief executive officer, said: “It has been a challenging fundraising environment, but we are proud to have succeeded where we know others have not had similar success. We are pleased that our track record has instilled our partners with the confidence to step up and invest with us.”
The firm’s prior fund, Parmenter Realty Fund III, was a 2006 vintage fund with $245 million in commitments. Fund IV follows the same investment strategy as its predecessor vehicle.