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WHITE PLAINS-Acadia Realty Trust has created a third discretionary investment fund. Acadia’s Strategic Opportunity Fund III LLC will hold $500 million of discretionary institutional capital, which will allow the company in acquire or develop assets totaling $1.5 billion on a leveraged basis.

Fund III will be similar in structure and mission to Acadia’s two previous funds. It will have 13 institutional investors, many of which are return contributors from prior funds. The returning investors, and six new ones, will contribute $400 million toward the fund with Acadia adding the last $100 million. According to company officials, about 90% of Fund III’s offerings have closed, and the entire offering is expected to close during Q2.

“We are quite pleased with the high level of institutional interest we have received for participation in the Fund,” says Kenneth Bernstein, president and CEO or Acadia. “We believe the size of Fund III will enable us to remain both disciplined and opportunistic. It remains our belief that the discretionary investment fund structure is an ideal vehicle for Acadia to continue to both maximize our capital structure and shareholder value.”

The newest fund will go to growing the company’s urban-infill redevelopment platform. In conjunction with New York City-based P/A Associates, Acadia has eight such projects in the wings, totaling $1 billion in value. One of the most recent projects the JV has entered into is the Fordham Place Project in the Bronx. The mixed-use development will contain 160,000 sf of office space and 100,000 sf of retail. Together they are also constructing a 1.6-million-sf mixed-use tower in Brooklyn at the Gallery at Fulton Street.

Additionally, the fund will focus on properties controlled by retailers. “Acadia will continue to focus on the investment strategies that have proven successful for us to date, and we are excited about the diverse and robust deals in our pipeline,” Bernstein says. The exact deals in the wings for Fund III were not disclosed.

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