ICM Launches $50M Value Add Fund
The fund has already completed its lead investment, the purchase of a 29-key oceanfront hotel in Dana Point.
Integrated Capital Management has launched Integrated Realty Capital II LP, its fourth investor offering. The new fund expects a $50 million capital raise and will target GP or sponsor equity investments averaging approximately $3 million to $5 million. The fund will invest in value-add opportunities across asset classes.
Integrated Realty Capital II LP has already closed on its lead investment, a 29-key oceanfront hotel directly across from the Doheny State Beach in Dana Point. The fund plans to completely renovate and rebrand the hotel. Once the renovation is complete, the hotel will feature first floor rooms with ocean views and private patios and second floor rooms featuring panoramic ocean views and balconies. To complete the purchase, the fund quickly raised $14 million in just three weeks from returning investors.
The hotel was the initial investment with the fund’s launch, but it also has acquired an affordable housing portfolio program in the Midwest, which will serve as a bottom-line ESG investment, according to John Carrick, managing principal and co-founder of ICM. The fund expects the portfolio to generate a significant return while supplying highly in-demand affordable housing to the market. Investments like these are also intended to target new investors and expand the current investment pool.
ICM has had an active year. In addition to the launch of this fund and these two acquisitions, the firm broke ground on long-awaited outdoor mixed-use development Cross Creek Ranch in Malibu. The project has been decades in the making, and is the largest development approved in Malibu since 1991. It will feature 70,000 square feet of retail, including 10,000 square feet of interior dining space, and 42,000 square feet of class-A office space.
The project’s development stakeholders secured a $130 million loan for the construction of development. Related Fund Management funded the loan, which is among the largest in Los Angels County so far this year.
With $3 million to $5 million investments per $50 million to $250 million, Integrated Realty Capital II LP has an aggregated estimated $1.5 billion in total capitalization.