Following the close of its twelfth commingled real estate fund, Tricon Capital Group has been active in Texas, investing in two residential developments in the Lone Star State this month.
The Toronto-based real estate investment firm, which specialises in distressed residential assets in the US and Canada, has made a new investment in Dallas on behalf of its latest US opportunistic real estate fund. In addition, the firm has formed a roughly $150 million separate account for the acquisition and development of a master-planned residential community in Houston.
Tricon has made an $11.2 million equity commitment to support the acquisition and development of a 60-acre, mixed-use development site located one-half mile south of the Dallas Convention Center. Upon completion, the approximately $400 million project is expected to feature a mix of residential, commercial and retail uses. The project also will provide future residents and visitors with direct access to the planned Trinity Lakes, a component of the multi-billion dollar Trinity River Corridor Project. The developer of the mixed-use site is Matthews Southwest.
“The development of the project represents a tremendous opportunity for Tricon to participate in the redevelopment of downtown Dallas,” said Tricon’s chairman and chief executive officer David Berman in a statement. “In addition, we are extremely excited about the re-entry of Tricon into the Dallas marketplace, a city where Tricon made its first US investment in 1990.”
Tricon’s investment in this mixed-used development project is being made on behalf of Tricon XI, the firm’s latest US investment fund, which is seeking between $300 million and $400 million in equity commitments. A spokesman for the firm told PERE that Tricon XI is expected to hold an initial closing sometime this quarter.
In addition, Tricon has formed a $150 million separate account with an undisclosed Canadian institutional investor to support the acquisition and development of the 3,200-acre Cross Creek Ranch master-planned community in Houston. Tricon will commit 10 percent of the required capital to the transaction, with the balance being committed by Tricon’s institutional partner and the developer of the project, Johnson Development. The transaction will increase Tricon’s assets under management (AUM) to more than $1.1 billion, representing an increase of approximately 20 percent in AUM since 31 December.
Originally designed and developed by Trendmaker Homes, the Cross Creek Ranch project opened in 2008 and is currently home to more than 2,000 residents. In 2011, 246 new homes were sold at Cross Creek Ranch.
These two recent development deals closely follow the closing of Tricon’s latest Canadian real estate fund, Tricon XII, which wrapped up fundraising with $186 million in commitments last month. A spokesman explained that Tricon’s even-numbered funds target Canadian assets, while its odd-numbered funds target properties in the US. Tricon XII had its first close in March 2011.