Rothschild fund to invest $200m in Westcore

A private equity real estate fund managed by Rothschild Realty is investing up to $200 million in the San Diego-based company to acquire debt and equity in industrial and office properties on the West Coast.

Westcore Properties has obtained an investment of up to $200 million from Five Arrows Realty Securities V, a private equity real estate fund managed by New York-based Rothschild Realty Managers.

Backed by the investment, “our acquisition volume will increase to $250 million to $350 million per year,” said Marc Brutten, Westcore’s executive chairman, in an email to PERE. The company plans to deploy the capital over the next two years, but “will continue to recycle capital over the next five to seven years,” he added.

Over the past two years, Westcore has acquired debt and equity on more than 5 million square feet of office and industrial space with a total value of more than $350 million, according to president and chief executive Don Ankeny.  The company, which has focused on the western US and certain European markets, “will continue to invest in the same type of deals it has acquired and operated in the past,” he said. “There is no change to the company’s strategy” based on the new investment.

Five Arrows Realty Securities V, which closed in July 2008 after raising $839 million in equity, targets investments that involve a strong management team and a highly developed and focused business plan, according to Rothschild Realty’s website. “Westcore is a strong, vertically-integrated platform of seasoned real estate professionals with a 30-year track record of providing exceptional returns to its investors,” said Andrew Silberstein, managing director of Rothschild Realty, in a statement.

The investment also involves the formation of a new board of directors that will include Brutten, Ankeny, Silberstein and Matt Kaplan, a managing partner at Rothschild Realty.  The board will “ensure that our governance is formalized and review acquisitions,” Brutten said.

Since 1996, Rothschild Realty has focused its investment activity on making private placements into public and private real estate firms through its Five Arrows Realty Securities private equity funds. It has made $2.3 billion in investments on behalf of public and private institutional pension plans, endowments and foundations since its founding in 1981.