A little over one year after launching its third value-added commingled vehicle, New York-based real estate investment firm Savanna has held the fund’s first close on $105.3 million in equity for distressed office properties in New York, Washington DC and Boston.
Investors in Fund III are said to include the Kansas Public Employees Retirement System, which committed $40 million in July; the Teacher Retirement System of Texas, which committed $15 million in July; and the Ohio Police and Fire Pension Fund, which committed $45 million in June.
The Savanna Real Estate Fund III, which launched in August 2012, is targeting $650 million in equity. The fund is following the same investment strategy as Savanna’s previous vehicles, acquiring ‘zombie’ office properties, upgrading them to Class A buildings and leasing them up. Savanna’s website noted the firm usually invests $15 million to $60 million per transaction and targets a 20 percent return on average.
In the spring of 2011, Savanna closed on $550 million for Savanna Real Estate Fund II, exceeding its original target of $400 million. For its debut institutional fund in 2006, the firm raised $313 million. Representatives from Savanna declined to comment on the closing.