The fund will invest throughout the DC area in most opportunisticcommercial real estate categories, including distressed assets andpaper, Kelly says. Since it opened in January 2008 it has investedroughly $80 million in equity across nine transactions, he says.
The fund's investors are a mix of high-net worth individuals,university endowments and most recently, foundations. Typically JBG'sfunds have been comprised of one-third high-net worth individuals andtwo-thirds university endowment funds. However, JBG began fund-raisingin 2008 it found that its usual stable of investors did not have thesame capacity. So the company turned to a new category of investor--foundations--to fill the gap, Kelly says. Fund VII is comprised ofone-third high-net worth individuals, one-third university endowmentand one-third foundations as a result, he says.
To accommodate the governance needs of the foundations, JBG formed aREIT structure within the fund, Kelly says. Changes in REIT law overthe past year or so made creating such a structure financiallyfeasible, he adds.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
