HOUSTON-After seven months of fine-tuning the plan, Hines and CalPERS will partner on a $100-million fund to develop up to $200 million of multifamily and retail projects in Mexico.
Gary Holtzer, a Hines vice president based in San Francisco, will manage the new fund, HCM Holdings LP, which will have an eight-year shelf life. Both partners already have invested heavily in Mexico.
"We believe the economy is strong," Holtzer tells GlobeSt.com. "There is a strong middle class developing and sound fiscal policy." He says for-sale condos and grocery- and big box-anchored retail centers will be developed with the middle class in mind. The first project should be under way within six months although there's no land in hand at this time.
On average, developments will run from $10 million to $20 million. "We have a good strong pipeline of projects," Holtzer says. "CalPERS is open-minded about a sister fund if we are successful with this one." The game plan calls for the capital to be invested within three years, according to Holtzer.
CalPERS has two other funds in Mexico. The locally based Hines, marking its 30th year in the country, has completed more than three million sf of office, residential and industrial product and built out in excess of 700 acres. Its current portfolio consists of seven markets: Querétaro, Mexico City, Guadalajara, Acapulco, San Luis Potosí, Toluca and Michoacán. Holtzer says it's not likely that any of its current properties will be rolled into the fund.
"This expansion into Mexico is an excellent platform on which Hines can extend its presence in its existing locations and push into other key development markets," Mark Cover, Hines senior vice president, says in a press release. The fund's terms include a discretionary provision to allow investment in other real estate products.
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