By Jon Peterson
Greensboro, N.C.-based Bell Partners has recently opened a regional office in San Francisco to pursue investment opportunities for the first time in both Northern and Southern California, and ultimately in the Pacific Northwest, as well. The funding for these acquisitions will be the manager’s $600 million equity raise for its Bell Apartment Fund VI.
One of the investors in this commingled fund was a $75 million commitment from the Pennsylvania Public School Employees Retirement System. The pension fund stated in a board meeting document that the up to 20 percent of the fund can be invested in markets in California.
The capital for Fund VI will be invested on a national basis. Some of its other targeted markets besides California are Boston, Atlanta, Dallas, Austin, Denver, North Carolina and Florida.
Nickolay Bochilo, senior vice president of investments at Bell Partners and the head of the office in San Francisco said, “Bell will target value-add, core plus and core style investment opportunities in high quality urban and suburban locations of the Bay Area, Los Angeles, Orange County and San Diego, and ultimately expand our footprint to Seattle.”
All of the capital for Fund VI will be invested in value-add apartment transactions. Bell Partners will consider four types of transactions for Fund VI. One is a physical renovation of the property. Another would focus on improving the overall operations of the property. Yet another could be investing capital into properties located in emerging neighborhoods, as well as properties that have pricing dislocations.
The commingled fund has targeted net internal rate of return of 11 percent to 13 percent. The main investors in the fund were a combination of institutional investors around the world and accredited high net-worth individual investors.
Most of the acquisitions for Fund VI will be properties that range in size from 150 to 450 units. Properties will be acquired with a combination of cash and up to 65 percent debt. This will give the fund a total capitalization of around $1.7 billion.
Bell Partners also has a capital source that invests in core apartment complexes across the country. The manager has a $1 billion separate account with a German real estate special fund managed by HANSAINVEST. The venture is focused on buying core stabilized assets in major markets.
The company’s office will be located in downtown San Francisco at One Market Street in the Spear Tower.