HOUSTON-PM Realty Group and Americus Real Estate Investments have launched a $250-million fund to acquire government-occupied properties. The Americus Fund II will target class A, B or C office and industrial properties that are at least 50% leased to state, county or city governments in primary, secondary and tertiary markets of the US.
PM Realty's executive vice president Ernest Johnson tells GlobeSt.com that the plan consists of $50 million of equity, with the balance coming from the capital markets. "We're talking to a couple of national debt providers and brokers, national houses, who are interested in this," Johnson says.
Johnson says the buyers are targeting properties from $5 million to $75 million. The anticipated hold is five to seven years. He says the focus will be properties constructed within the past 15 years, but consideration of older ones isn't out of the question. "There are some older properties at the city, state and local government level that have been well-maintained and refurbished properly," he says. "We'll judge each property on its own merits."
Johnson explains the fund fits PM Realty's strategy primarily for two reasons. "A lot of our pension fund clients are city, state and county institutions," he explains. "They understand the property and understand the investment." In addition, the assets aren't competitive with PM Realty's client base. "As PM is a service provider, we're sensitive when it comes to competing with our clients and none of our clients follow this market," he says. "This allows us to take advantage of our strengths in service and helps us acquire our own product as well."
PM Realty will lead the acquisition team and provide property management and leasing services. Americus will be the portfolio's asset manager.
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