MIAMI—Matthew L. Adler has his finger on the pulse of commercial real estate in the Southeast and beyond. He currently manages assets spanning 7.2 million square feet in the southern and eastern U.S.

His latest project, a joint venture between Adler Group and Kawa Capital Management, hit the ground running in February, with Adler Kawa Real Estate Advisors (AKREA), inking two acquisitions in short order.

In part one of this exclusive interview, GlobeSt.com caught up with Adler to discuss those acquisitions, as well as how foreign buyers are altering the investment market. In part two, we asked him about his interest in certain asset classes, the competition for assets available at below replacement costs, and his capital raising efforts.

GlobeSt.com: You have concentrated your acquisitions primarily on light industrial and office space. What draws AKREA to these asset classes?

Adler: We have focused on investing in and operating multi-tenant office and industrial properties going back generations. There is less competition for these assets due to their management intensive nature.

AKREA's vertically-integrated platform offers a built-in advantage: We can purchase properties at relatively high cap rates in order to generate cash flow. Additionally, there is usually a lower re-tenanting expense. We sometimes refer to them as “commercial apartments” as they often behave like multifamily residential assets.

GlobeSt.com: You have said that AKREA is focused on purchasing existing assets below replacement costs. Is there stiff competition for these properties?

Adler: There is competition to purchase just about everything today, but we concentrate on a unique niche: mid-market deals requiring $5 to $15 million of equity and hands-on management expertise. Generally speaking, buyers do not purchase management-intensive properties without prior operating expertise, but this is our sweet spot. Our target deal size is above that of the average high-net-worth investor but below that of an institutional buyer. These criteria eliminate a good deal of competition.

GlobeSt.com: How is the capital raise for the current fund progressing, and what is your timeline for raising additional capital?

Adler: Adler Kawa Real Estate Fund II has raised approximately $50 million to date. We completed an initial closing and continue to raise funds through both on-shore and off-shore structures. We've deployed approximately $17 million through our first two acquisitions and we are authorized to raise up to $100 million. We anticipate being open for subscriptions through the end of 2013 or into early 2014.