LOS ANGELES—CBRE Global Investors on Thursday said it had closed the latest in its series of US value-add funds at north of $1.3 billion. With equity commitments from 26 institutional investors worldwide, CBRE Strategic Partners US Value 7 drew more investors and raised more capital than its predecessor, which closed in December 2012 at $1.1 billion from 22 investors. A spokeswoman tells GlobeSt.com it's the largest to date of the 10 US Value funds raised over the past 15 years.
US Value 7 is expected to have total purchasing power of more than $3.3 billion, including leverage. It has been 75% committed to date, with investments in office, multifamily and hotel assets.
The newest fund is a continuation and evolution of CBRE Global Investors' enhanced-return strategy domestically. The company says its investment team is targeting value-added-level returns with institutional-quality real estate at a discount to replacement cost, in US markets that are expected to outperform the overall real estate market.
In addition, the team is working to execute a value enhancement strategy. Pillars of this strategy include repositioning underperforming assets and improving occupancy levels through implementation of Strategic Partners' tenant amenity programs, including 5-Star Worldwide for office buildings and Inspired Lifestyle for multifamily assets.
“We have a cycle-tested investment team that has already made substantial progress toward executing a disciplined and selective investment plan where we expect to be able to enhance value through our strong operations,” says Vance Maddocks, president of Strategic Partners US. “We thank our investors and their consultants for the confidence they have placed in us through their commitments to this fund.” Among those investors were CalSTRS and the Teacher Retirement System of Texas, each of which committed $200 million to US Value 7, according to published reports.
The close of US Value 7 fundraising marks the third real estate fund of $1 billion or more that GlobeSt.com has reported in the past two weeks. On June 19, Fortress Investment Group capped Fortress Real Estate Opportunities Fund II at $1 billion; the following Monday, AllianceBernstein said it had exceeded its $1-billion target for US Real Estate Partners II LP, closing it at $1.2 billion.
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