San Francisco-based investment firm Swift Real Estate Partners has held a final close on $325 million in equity for its debut vehicle, Swift Real Estate Partners Fund I. The firm – started by Christopher Peatross, the former office property portfolio manager at The Blackstone Group – held a first close for the value-added fund in August on $75 million.
Fund I had an original target of $250 million but, due to increased interest, Swift was able to bump up the vehicle’s permitted size to $325 million, according to Douglas Abbey, chairman. Swift garnered a “healthy mix” of both domestic and international investors for the fund, including foundations, endowments, public and private pensions, high-net-worth individuals and family offices. According to pension documents, Teacher Retirement System of Texas committed $15 million to the fund in January as a part of its emerging managers program.
“Getting a first closing for a first-time fund is challenging,” Abbey told PERE. “Once we held that close and started buying properties, the fund generated a significant amount of interest.”
Swift will use Fund I to acquire value-added office buildings along the West Coast, specifically in the San Francisco Bay Area. The vehicle has begun investing its capital, purchasing the 77,000-square-foot Corporate Terrace office building in Lafayette, California for $20 million in October. Abbey projected that, with leverage, Fund I will have approximately $750 million in buying power.
Swift plans to invest the fund’s capital within the next two years. “If we meet with investment success, we expect there will be a follow-on fund,” Abbey said.
Peatross, the former president and chief executive officer of CarrAmerica, Trizec Properties and Equity Office Properties, left Blackstone in June 2010 to form Swift. Peatross originally focused his venture on Northern California properties but has since expanded the firm’s scope to the entire West Coast.
Abbey, meanwhile, served as co-founder of both AMB Property, which merged with ProLogis in 2011, and IHP Capital Partners before joining Swift at the beginning of 2013. Rather than using a placement agent for Fund I, Swift relied on relationships that Peatross and Abbey have established with investors.