Trigate Capital, the Dallas-based private equity real estate firm, has garnered $225 million in commitments for its third fund from returning institutional investors, sources with knowledge of the fundraising process told PERE.
The firm has a $350 million target for the fund with a hard cap of $400 million. Trigate declined to comment.
PERE understands that while the firm has not yet started officially marketing TriGate Property Partners III it held a first close for the vehicle in December. The firm closed TriGate Property Partners II on $324 million in June 2013 and finished deploying capital from the vehicle last month.
Trigate draws capital from institutional investors, many of which returned for commitments to the latest fund, including the San Francisco Employees’ Retirement System, which allocated $40 million to the second fund. The California State Teachers’ Retirement System, the largest teachers’ pension fund in the US, returned to invest in the third fund after committing $100 million to the firm’s second fund and was the sole investor in Trigate’s first $120 million fund in 2007, according to PERE Research & Analytics.
Sources said the firm has a plan for capital deployment similar to the earlier funds in the series, seeking distressed debt and equity of existing properties with the goal of value creation through the recapitalization and repositioning of Class A and B real estate assets. TriGate focuses its activities in Sunbelt markets including Florida, Georgia, Texas, Arizona, Colorado and California and has made multiple investments in suburban Boston and Chicago.
The firm’s recent activity includes purchasing a 90 percent stake in the Comerica Bank Tower, one of Dallas’ tallest skyscrapers, in October for $150 million, according to real estate data site Real Capital Analytics. CBRE Global Investors sold the property, built in 1987, at 65 percent occupancy, and M-M Properties, a Houston-based investment firm, held onto the 10 percent stake.