American Ventures Partners Launches $1 Billion Fund to Invest in Distressed U.S. Commercial Real Estate
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CORAL GABLES, Fla., March 18, 2021 (GLOBE NEWSWIRE) -- American Ventures Partners today launched the American Ventures Strategic Property Fund to invest in distressed U.S. commercial real estate, with a target capital raise of $1 billion. The investment fund provides a tax-advantaged structure to non-U.S. investors.
“Uncertain times offer extraordinary opportunity,” said Philip Blumberg, chairman of American Ventures. “That holds true like never before, with Class A office properties available at steep discounts. Geographically, our best opportunities will be found in states with comparatively low costs of living and taxes, such as Texas and Florida, markets where we have strong experience.”
American Ventures is one of the top-performing, institutional real estate investment managers in the United States, posting average annual returns of 18%, net of fees and expenses, since 1992. Today’s launch marks the fifth distressed commercial RE fund formed by Mr. Blumberg over three decades - forming funds shortly before or during severe market troughs.
Mr. Blumberg has a 30-year track record in raising investment capital, buying U.S. commercial real estate and selling ahead of softening demand. In 2006, he foresaw the emergence of the Great Recession and by 2008 had sold his national real estate portfolio - comprised of Class A office properties in the country's Sunbelt - with most holdings selling at record prices.
“We have never lost investor capital, even in economic downturns,” said Mr. Blumberg. “In fact, we work best in distressed markets – where we manage both the acquisition process and the properties themselves with our value-add services. This has proven time and again to boost occupancies, rent, cash flow and tenant retention.”
Underpinned by an expansive property-sourcing network, American Ventures can uniquely access both off-market properties and formal bid opportunities throughout North America. Its real-estate services arm provides “white-glove” tenant support and property management.
The new fund will focus on properties valued at more than $50 million and priced below replacement cost.
The American Ventures Strategic Property Fund provides a tax-advantaged structure through a fixed-bond return and an inflation-adjusted equity return.
- Targeted returns: 15-18%, net of fees.
- 8% bond has minimum 6% annual distribution over fund life. Bond backed by conservatively leveraged, well-located Class A properties and supply-chain facilities.
- The fund’s equity unit provides inflation-adjusted cash-flow and growth. It yields an 8% preferred return on the entire investment. Above the 8% yield, 80% of additional profits will be distributed to investors.
- Investor commitments received prior to the first closing will receive a 1% premium, increasing preferred return to 9%.
- Portfolio will maintain low/moderate leverage, while controlling tenant size and industry exposure.
About American Ventures Partners
American Ventures Partners invests in and operates North American commercial real estate. Its competitive differentiation is underpinned by collective skills and experience to actively manage all aspects of the commercial real estate process. For more information, visit https://www.amvepart.com/pages/Home.cfm.
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