Behringer Harvard Eyeing Product Gap With $65M Fund Closing

DALLAS-Behringer Harvard's bedding down of a $65-million opportunity fund has opened the door for a second drive to build an asset-buying pool for comparable value-add properties. A lead executive for the locally based investment group isn't saying when another fund will launch, but acknowledges it's highly possible another one will follow in its tracks--at some point.

"I think it's reasonable to say that we would want to capitalize on the success of this fund," says M. Jason Mattox, senior vice president. He tells GlobeSt.com that the Behringer Harvard Strategic Opportunity Fund I LP resulted in leveraged acquisitions of roughly $100 million from a $65-million fund raising from accredited private US investors.

The opportunity fund's closing creates a gap in the firm's product line. "We are definitely interested in keeping a diverse selection of funds," Mattox explains. "This is a private fund and it's structured differently than the Opportunity REIT." Behringer is in the midst of raising $400 million in a two-year offering for the Opportunity REIT I Inc. and $960 million for a REIT I Inc. fund, which is focused on core acquisitions.

Because the Opportunity Fund I LP surpassed expectations, it's a safe bet that another one will launch with similar parameters for value-add buys with a three- to five-year hold strategy. Since August 2005, the fund has bought the 239-room Lakeway Inn in Austin; 172-unit Stone Creek Apartments and eight abutting acres in Killeen, TX; 350-unit Firestone Apartments in Fort Worth; acreage at Lake Tahoe for an upscale condo project; 18-story Doubletree Los Angeles along Wilshire Boulevard on the West Side; and five-story Tupolevlaan Building in Amsterdam.