Transwestern completes investment arm spinoff

The Houston-based real estate firm officially has ended its affiliation with its Chicago-based principal investment arm. The entity, now known as Pearlmark Real Estate Partners, has moved offices and is seeking capital for a new fund.

Following a management-led buyout that closed late last year, the Chicago-based real estate principal investment firm formerly known as Transwestern Investment officially has spun off from Houston-based Transwestern and has changed its name to Pearlmark Real Estate Partners. 

According to an announcement made by the rechristened firm, Transwestern Investment co-founder and chief executive Stephen Quazzo will continue to serve as chief executive of Pearlmark. The senior management team also will remain in place. 

“There's no change in strategy and no change in the team,” Quazzo told PERE. “We've always acted independently and were never a subsidiary. We were just affiliated [to Transwestern] through common ownership.”

In conjunction with the spinoff, Pearlmark has relocated its Chicago headquarters to 200 West Madison Street from its previous space at 150 North Wacker Drive. The firm occupies 24,000 square feet in the one million-square-foot office tower – a property in which Pearlmark's $680 million Aslan Realty Partners II fund has a 35 percent investment stake. Its regional offices in Denver, Los Angeles and New York remain the same.

Transwestern Investment was founded in 1996 and joined Transwestern upon inception. “We chose the Transwestern brand right away since they had no investment operations,” Quazzo said. In 2010, the firm initiated the process of spinning out from Transwestern and, after completing the spinoff in December, decided to change its name to avoid confusion. “We also wanted to wait until our lease [at 150 North Wacker] was up before making the change,” he added. 

Separately, Pearlmark is raising capital for its second multifamily fund, a follow-up to its $226 million Transwestern Multifamily Partners fund. Pearlmark Multifamily Partners II is looking to raise $300 million in equity and is targeting net returns of 10 to 12 percent. 

Since its formation, Transwestern Investment has invested more than $11 billion in office, industrial, retail and multifamily assets, as well as mezzanine loans throughout the US. Additionally, the firm has acquired interests in 470 properties through a national value-added investment strategy. Currently, it oversees roughly $4 billion in US commercial real estate investments.