Globest.com EXCLUSIVE: NYC's Praedium Plans $500M in SoCal Buys

Chris Hughes, principal at the Praedium Group, tells GlobeSt.com that the new purchases will build on an existing Praedium Group portfolio of properties in Southern California, where the investment group has acquired more than $325 million of multifamily, office, industrial and retail properties in the past few years. He says the group typically looks for investments priced from somewhere between $10 million and $20 million to deals of $40 million to $50 million. The funds for the Southern California investments will come from Praedium's recently closed $465-million Praedium Fund V. The fund is investing in mid-cap assets throughout the US and Canada in the $10- to $70-million range, targeting multifamily, office, retail and industrial property types.

Praedium focuses on underperforming and undervalued assets throughout North America, with more than $2 billion in total investments to date. Hughes acknowledges that finding undervalued assets has grown more difficult in Southern California because so many investment groups are chasing value-added deals, but Praedium believes the deals are still here. "It could be that an asset is undermanaged," he explains, "or it could be that the asset is subject to a risk that the current owner doesn't want to deal with "a fully leased asset where the tenant is known to be leaving, for example."

During the last six months, the Praedium Group has closed several acquisitions in Southern California. Among these were its acquisition of the 169-unit Summer View Apartments in Sherman Oaks for $17 million; the $31-million purchase of 200-300 Corporate Pointe Office Center in Culver City, which includes two five-story buildings and a seven-level parking garage totaling 205,492 sf; and 5601 E. La Palma Ave., a four-story office property comprising 117,500 sf in Anaheim that Praedium bought for $11 million.

"With some the strongest markets in the US, we think Southern California's ongoing economic growth will present tremendous opportunities moving forward," Hughes says.Praedium was formed in 1991 with a leading international investment bank as its sole investor, and it has been a sponsor of commingled real estate private equity funds since 1994. Its funds have attracted investors that include public and corporate pension funds, financial institutions, insurance companies and endowments.