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PARAMUS, NJ-New investment funds, based here and throughout the US, are targeting office buildings and in some cases have already closed deals on distressed assets. The new Paramus-based fund is KABR Real Estate Investment Partners, which targets opportunistic purchases in the New York Metro area and South Florida, but it is just one of a number of funds and investment groups that have formed in recent months to joint the growing list of those already on the lookout for office deals in a distressed environment.

KABR recently acquired 85 Challenger Rd., a vacant, 235,057-square-foot office building in Ridgefield Park, NJ. The newly formed investment group joins funds like Newport Beach, CA-based Turner Development Corp.’s recently closed Turner Opportunity Fund I and another West Coast venture, Steadfast Capital Markets Group, in looking for office deals.

KABR, Turner and Steadfast are looking for assets other than office properties as well, and in some cases are also in the market for distressed debt in addition to fee-simple purchases of properties. Steadfast also makes the distinction between “distressed market” and “distressed assets,” explaining that the private and publicly registered investment vehicles it intends to form will be looking for basically good, solid properties in a distressed market. In the case of KABR, the deal also reflects another trend lately in acquisitions: the all-cash purchase. A number of deals that have closed lately around the country, including purchases of other types in addition to office properties, have closed on an all-cash basis as buyers formerly sitting on the sidelines have finally seen some prices reach what they consider to be realistic levels.

In yet another recently launched West Coast venture, industry veterans Ron Lack and Mark Wayne have formed a new company called Cypress Realty Advisors to pursue acquisitions of office properties with an emphasis on distressed assets in fundamentally strong submarkets. Cypress is based in San Diego, and the two San Diego commercial real estate execs, who have more than 40 years of combined experience, will be looking in markets throughout California and Arizona, with an initial focus in San Diego. The company will also provide owners and lenders with advisory services including strategic planning and asset management.

The funds are also taking off internationally, as in the case of London-based Henderson Global Investors, which hopes to raise nearly $796 million through a seven-year closed fund. The London-based firm hopes to take advantage of the cyclical nature of the office market, buying now when it is easier to get key assets at a discounted rate, according to a report in PropertyEU.

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