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AUSTIN, TX—AIC Ventures’ latest net lease property fund is beginning to invest, with two property acquisitions expected to close later this month.

The fund, NL Ventures VIII LP, has already raised more than 80% of its equity base, managing director of acquisitions David Steinwedell tells GlobeSt.com. The first two acquisitions involve industrial properties, one on the West Coast and the other on the East Coast, and are under-$10-million buys.

As in the case of its previous net lease property funds, investors in the new fund are primarily family offices and high net worth investors, Steinwedell says. And while the shift isn’t large, “we’re probably going to have more new investors in the fund than we historically have had in the past,” he adds.

By the time the fund is fully invested, industrial properties (including both distribution and light manufacturing assets) are expected to account for 70% to 80% of its portfolio, with the remainder flex and office assets. Both sale-leasebacks and existing net-leased properties with middle-market company tenants will be targeted, and Steinwedell says that like in 2009, the company expects to make acquisitions coast to coast. Its typical deal size will be $10 million, with a range of $3 million to $40 million. Acquisition criteria also include lease terms of 15 years or longer.

The newest AIC fund is willing to consider other types of deals as well, including partial leasebacks and industrial build-to-suits. While it wouldn’t be the first time AIC has pursued build-to-suit opportunities, Steinwedell says this area will garner more emphasis from the company than it has in the past. “We’re trying to expand. I think there are going to be some interesting opportunities as companies look to consolidate operations, gain efficiencies,” he adds. “You can get a brand new building at a much lower basis, because construction costs have come down.”

Steinwedell says he anticipates seeing NL Ventures VIII fully invested by the end of 2010–which means deploying an anticipated $100 million of equity into approximately $250 million of properties–but he doesn’t necessarily expect it to be easy. “Unfortunately,” he says, he expects the net lease marketplace in 2010 to be “not much different than it has been recently, which has been very difficult.”

But while tenant credit and sellers’ pricing expectations have been the biggest challenges for AIC in 2009, Steinwedell says he believes that the latter will begin to abate as next year progresses.

“We’ll probably see an increasing amount of offerings, especially as we move through the year,” Steinwedell predicts. “I think we’ll see more and more transactions begin to happen, because buyer and seller expectations are moving closer and closer together. People are getting a sense of what today’s market is.”

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