Wheelock strikes largest deal to date

In its largest equity investment to date, the Boston- and Greenwich, Connecticut-based real estate investment firm has purchased the majority of assets belonging to a Georgia homebuilder for its first institutional fund.

Wheelock Street Capitalhas bought substantially all of the assets of Georgia-based homebuilder John Wieland Homes and Neighborhoods.

Under a new joint venture with the Wieland family, the real estate fund manager will form a new company with the John Wieland Homes and Neighborhoods name.

The transaction, which was valued at more than $170 million, will include approximately 300 homes and more than 5,000 lots across the Southeast region of the US, as well as additional asset that Wieland family contributed to the partnership in exchange for equity. John Wieland, who founded John Wieland Homes and Neighborhoods in 1970, will serve as chairman of the new company. Wheelock expects to expand the business with additional acquisitions.

“We are very excited about our joint venture and the opportunity to capitalise on the current housing rebound through Wieland’s quality brand and strong core positions in the most attractive southeastern markets,” said Jonathan Paul, managing partner of Wheelock Street Capital, in a statement. “The joint venture’s high quality lot inventory, combined with a strong balance sheet for new acquisitions, should allow for meaningful growth.”

The acquisition of the homebuilding assets was capitalised largely with equity, with Wheelock’s permanent equity in the venture expected to remain more than $100 million. The transaction marks the firm’s largest equity investment to date, and the eighth on behalf of Wheelock Street Real Estate Fund (REF), its first institutional real estate fund.

The fund’s transactions have primarily focused on the hotel and residential sectors, including the purchase of Canyon Falls, a 1,129-acre master-planned community in Texas, from an affiliate of Highland Capital Management in July. To date, the manager has invested $322 million of equity from Wheelock Street REF, which held a final close of $525 million in June.