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Parmenter launches separate accounts initiative

The Miami-based real estate investment firm has begun its first foray into separate accounts, targeting core office assets in the southern US on behalf of institutional investors.

Miami-based Parmenter Realty Partners has launched a new separate accounts initiative, targeting core office properties throughout the southern US on behalf of institutional investors. 

Managing principal Tim Shine told PERE that increasing investor appetite for core assets beyond the gateway markets inspired Parmenter to launch the program. The initiative will target Class A office properties in primary Southern cities such as Atlanta; Dallas; Fort Lauderdale, Florida; Houston; Memphis; Miami; Nashville; Phoenix; and Raleigh, North Carolina. 

“These markets can offer consistent cash flow while also offering future value at reasonable cap rates with the potential for rent growth,” Shine said in a statement. With its value-added commingled funds, Parmenter typically focuses on assets valued at $10 million and higher, but Shine explained that the separate accounts likely would invest in larger properties. He noted that the new initiative will not compete with the firm’s fund strategy. 

Though Parmenter has not yet signed any formal agreements, Shine said the real estate investment firm has spoken with several of its existing clients as well as prospective partners and expects to see more interest from endowments, foundations and pension plans as it continues marketing the initiative. The specific approach to each separate account will be tailored to fit clients’ needs, including their real estate portfolio objective, risk and return targets as well as property profile and location preference. 

Parmenter is confident in the potential of its debut effort as it looks to build upon the firm’s 24 years of relationships and experience. “We have a depth of resources and intimate market knowledge, both of which are critical to quality execution,” Shine told PERE.

Parmenter currently is investing the last of its latest value-added fund and announced its first disposition last month—a Houston office property that sold for $37 million, according to data provider Real Capital Analytics.  In August 2012, Parmenter Realty Fund IV closed on $253 million in equity alongside a $51 million co-investment, giving it approximately $1 billion in buying power. Investors in that fund included the Tennessee Consolidated Retirement System, Hatteras Investment Partners and The Endowment Master Fund.