CHICAGO—Origin Investments has decided to expand its portfolio of real estate investment offerings by establishing an income-focused real estate debt fund. The Chicago-based firm is nearing the final closing of its third fund, offerings that focused on building wealth, and felt it was time to give investors another option.

“We're looking for something that can provide investors with quarterly distributions,” Brady Dawson, the newly-appointed managing director, debt financing, tells GlobeSt.com. Instead of acquiring developments and buildings that Origin seeks to revive, this new vehicle will act as a lender for other projects. “It's lower risk.”

Origin's co-founders Michael Episcope and David Scherer decided to hire Dawson, a commercial real estate professional with 17 years of experience within global structured finance companies, as part of a long-term, strategic plan to establish and manage a balanced portfolio of investment offerings.

“I spent the majority of my career at GE Capital,” Dawson adds. “And most of my time was spent on loan originations.” In his most recent position at GE, Dawson was responsible for originating senior mortgage and mezzanine debt financing opportunities with national real estate investors and commercial mortgage brokers. In that role, he analyzed over $11 billion of new financing requests and was the lead director for more than $500 million of new lending commitments averaging 18%+ return on equity.

Dawson expects that the new offering will bring in a group of investors very similar to the ones who took part in the first three funds. In fact, Origin only made this move after a lot of dialogue with its investors, and found that many wanted an income-producing vehicle.

Currently, the third fund has raised more than $110 million, and acquired about $234 million in assets. Like its first two funds, Origin seeks to generate a 2X multiple for Fund III.

Origin has been quite bullish on suburban apartments. Recently, for example, in partnership with Draper and Kramer, Inc. and LEM Capital, it completed the acquisition of Village Park of Palatine, a 448-unit apartment complex in northwest suburban Palatine, IL. The class B property sold for about $48 million, or $107,000 per unit. The company looks on it as a classic value-add opportunity, and over the next two years, it will upgrade the complex, making it more attractive to renters and creating the opportunity to increase occupancies and rents. Origin typically holds properties like this for three to five years.

The new vehicle will continue the focus on apartment and office buildings, Dawson adds, “but certainly there is going to be flexibility as the vehicle grows.”

“Our goal is to help our partners generate income with the same success we've experienced creating growth and building wealth with our first three funds,” Scherer says. “Brady's experience will be instrumental as we launch this fund.”

Currently, the third fund has raised more than $110 million, and acquired about $234 million in assets. Like its first two funds, Origin seeks to generate a 2X multiple for Fund III.

The new vehicle will continue the focus on apartment and office buildings, Dawson adds, “but certainly there is going to be flexibility as the vehicle grows.”

Instant Insights /

Origin Investments Launching New Investment Vehicle

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