LOS ANGELES-Cohen Asset Management Inc. plans to invest up to $100 million of equity to acquire approximately $285 million of property nationwide in a newly closed fund, according to CEO Bradley Cohen. Cohen, whose new fund is called Cam Core+Fund I, says the fund has identified more than $90 million of assets that fit its investment criteria and is under contract to purchase the assets in its first 90 days.
The fund is targeting high quality properties, typically newer assets built since 1990 in prime locations, with current occupancies of at least 75%. Despite what Cohen calls "market fluctuations in recent months," he says that institutional investors are still looking for opportunities to invest in a value-added real estate fund "with an emphasis on producing a large portion of its return through current cash flow."
Although many buyers have done well via appreciation of their properties in recent years, Cohen suggests that many of the successes might be the result of cap rate compression and resultant market pricing rather than superior management. "That may be more the result of luck than operational skill," he says. "The successful returns in the next few years will come from active asset management."
The Cohen fund will target transactions in the range of $10 million to $20 million and has identified 24 target markets in the US. The markets include Phoenix, Dallas/Ft. Worth, Minneapolis, New York/New Jersey, Northern and Southern California, Baltimore-Washington, St. Louis, Cincinnati, Kansas City, Chicago, Portland and Seattle.
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