Canyon Capital Realty Advisors veterans Quincy Allen and Neville Rhone have formed their own boutique commercial real estate platform to capitalize on the improving fundamentals for assets that are priced below intrinsic value.
In an email sent to colleagues and PERE, Allen wrote that the new firm, Arc Capital Partners, “initially will focus on opportunities in the Sunbelt region of the US across major property types that are smaller, middle-market assets of up to $50 million of total asset value.” Based in Los Angeles, the platform will make value-added and opportunistic investments in “high-demand employment centers that will benefit from the rapid growth in the echo boom and diverse population groups.”
Arc Capital also will target properties that can be repositioned with strategic capital investments and business plan enhancements. Although Allen and Rhone declined to comment beyond the email, one source told PERE that the nascent firm could entertain the idea of doing a private commingled investment fund sometime in the future. The firm currently is planning to use family office and institutional capital to invest in one-off real estate deals.
Previously, Allen and Rhone, both managing directors and members of Canyon-Johnson Urban Fund’s investment committee, spent a decade at Canyon Capital, where they were responsible for sourcing debt and equity investments in major metropolitan markets. Prior to Canyon, Allen held real estate development and investing roles at Archstone Communities, Security Capital Group and Lazard, while Rhone held similar roles at Parsons Brinckerhoff, Morgan Stanley Real Estate Investing and Tishman Realty.
The launch of Arc Capital follows a trend in which individuals are leaving large firms to go into business for themselves to tackle smaller investments. As previously noted in PERE’s April 26 Friday Letter, it was announced last month that Starwood Capital Group’s former managing director Marc Perrin had left the Greenwich, Connecticut-based firm to start his own boutique investment firm, The Roxborough Group. It also was announced in April that Jonathan Kern left his post as president of global investment management at GE Capital Real Estate to strike out on his own. In March, Blake Berg and Mark Ibanez departed from JPMorgan Asset Management to start their own investment management firm, Wicker Park Capital Management.