Keith B. Rosenthal, New York City-based president of PhoenixRealty Group, tells GlobeSt.com that the investment and developmentfirm plans to proceed slowly on acquisitions initially. "Ourintention is to start out a bit slowly, for the near term of two tothree months, because we believe that the buy opportunities will bestronger some months from now than they are now," Rosenthal says.After that, he says, PRG will most likely adopt "a stronger buyingposture for the balance of the year."

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About 80% of the funds that Phoenix raises typically go towardwork force housing, with the remaining 20% financing othercomponents of mixed-use projects that the company acquires,develops and redevelops. The firm leans toward community-servingretail, office and medical office as the other elements of itsmixed-use projects.

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Phoenix raised these latest funds during a period of gradualdecline in the housing market nationally as well as the capitalmarkets turmoil of the past half year, but Rosenthal says that thechanging market conditions actually worked in favor of the firm'sefforts to raise capital.

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"People understand that we are going back to real estate basics,that the money to be made going forward isn't going to be on theluck of compressing cap rates, or the over-leveraging of propertiesor cheap debt," Rosenthal says. "The way money is going to be madegoing forward--and I don't think that people just discovered thisin the past two or three months--is that you've got to pick goodreal estate, pay the right price for it, then really roll up yoursleeves and squeeze all the value you can out of the realestate."

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With real estate reverting so clearly to time-testedfundamentals, the Phoenix president says, savvy investors arelooking to place their money with firms that know both the financeand the operations sides of real estate. "People understood that weare a vertically integrated real estate company that is good atunderwriting and finance but also has expertise in real estate anddevelopment," Rosenthal says. He says that the new funds' investorsunderstood that, "We have the right combination of talents to buyat the right price and to get value out of the real estate."

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PRG expects to deploy the capital in the new funds over the nexttwo to three years, ultimately adding to the net total of workforce housing stock through new construction as well as rehabbingor adaptively reusing real estate. For the near term, the firmexpects to invest more in rental housing than in for-sale projects.When it does acquire for-sale properties, it will likely buydistressed or under-performing properties, sticking to theprinciple of "making money on the buy," Rosenthal points out.

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Combined with existing Phoenix funds, the two new funds thathave closed increase the total Phoenix Realty urban fundcapitalization to $725 million. That $725 million is beingleveraged to create $3.5 billion in market-rate rental and for-salehousing, mixed-use properties and commercial developments in urbanand infill areas nationwide. J. Michael Fried, chief executiveofficer of PRG, says that investors' confidence in the new fundsendorses a long-term PRG strategy that "can weather changingcycles."

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