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Parmenter launches $500m ‘distress’ fund

The Miami, Florida-based firm has launched its fourth real estate vehicle to target distressed or under-managed office properties in the southern US region. The vehicle will also consider multifamily investments with ‘extreme distress.’

Parmenter Realty Partners is launching its fourth real estate fund, Parmenter Realty Fund IV, targeting $500 million (€338 million) in equity commitments. It is looking to acquire approximately $2 billion in assets.

Nearly all of the firm’s investors in its previous fund are expected to invest in Fund IV. The vehicle is expected to have a “limited” marketing period, according to the firm, with its first close expected in September 2008.

The firm’s third real estate vehicle, Parmenter Realty Fund III, closed in 2006 with $246 million of commitments. The vehicle – which has deployed all of its capital – focused on US office investments. The fund invested in US properties including the 845,419-square-foot Park Central office complex in Dallas, Texas; the 618,774-square-foot SunTrust headquarters in Richmond, Virginia; and the 433,453-square-foot One Financial Plaza in St. Louis, Missouri.

Parmenter’s fourth fund will continue on its strategy of investing in distressed and/or under-managed infill office properties in the Southeast and Southwest regions of the US. Fund IV could also consider multifamily investments where there is “extreme distress,” such as the South Florida market, with the firm saying in a statement there were “more opportunities” to acquire value-add assets in the area as a result of the “correction” in the debt markets.

Darryl Parmenter, Parmenter president and chief executive, said price corrections were occurring as the office market remained “generally sound” from a supply and demand perspective, owing to the “high cost” of building new assets.

Parmenter Realty Partners, headquartered in Miami, Florida with regional offices in Dallas and Atlanta, focuses on acquiring under-performing properties with current or future occupancy issues, with expansion or repositioning capacities.