Hanover Co. is playing offense in the current CRE environment and has raised $125 million for a fund that it has closed.
Known as the Hanover Opportunities Fund, the pool is actively looking at investments in commercial distressed and vacant buildings, or land in general, according to a statement by the Houston-based firm. After acquiring underperforming or underutilized assets under HOF, the developer's strategy involves redeveloping them into ground-up projects. Particularly, Hanover said it's targeting "early-stage opportunities" and it has the flexibility to close acquisitions quickly, with no entitlements in place.
Already, HOF has bought two multifamily developments in San Jose, California and one industrial project in York, Pennsylvania. It's unclear what the exact plans for them already are, but Hanover said it remains active for scoring opportunities specifically in the Mid-Atlantic, Northeast, West Coast and Sun Belt regions.
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“Today’s real estate environment is seeing a massive demographic shift and accelerated obsolescence in office, all against a backdrop of capital scarcity,” Brandt Bowden, CEO of Hanover, said.
“HOF is built to take on the risk to reposition assets, while providing immediate liquidity to sellers—often before entitlements are in place.”
While Hanover is mostly known for its residential properties, it has an industrial presence in New Jersey, Texas, Pennsylvania, Georgia and Maryland. The company's residential markets include more specific major cities, including Dallas, Los Angeles, Boston, Charlotte, Philadelphia, San Francisco and South Florida.
This month, some other major CRE firms have been active with funds of their own. Most notably, Brookfield Asset Management Ltd is seeing massive activity from its fifth flagship fund, which has already reached $16 billion in investor demand. The pool is focused on acquiring distressed assets at discounts of up to 40 percent. Also, Mesirow has raised $1.25 billion from its latest real estate fund, which is targeting Class A apartment buildings in major metro areas.
The activity comes despite interest rates remaining high and surging construction costs, which have created headwinds in the entire CRE sector.
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
