Rockpoint Raised $2.5B for New Fund, Puts two Bay Area Assets into the Portfolio

Rockpoint Group, San Francisco, Connecticut Retirement Plans and Trust Funds, Rockpoint Fund VI, East Bay, Livermore, Treat Towers, Walnut Creek, Bay Area

By Jon Peterson

Rockpoint Group has now raised a total of $2.5 billion for its latest commingled fund called Rockpoint Fund VI, as stated in a board meeting document by the Connecticut Retirement Plans and Trust Funds. The manager is planning to have a final close on the fund no later than the end of April with a targeted capital raise of $3 billion.

Rockpoint through a company representative did not respond to emails seeking comment for this story.

The fund manager has completed two investments for the commingled fund on assets that are located in the East Bay. One of these is a new apartment development with some retail planned near First Street in Livermore.

Rockpoint for its Fund VI made a total equity investment into the project of $48.9 million, as stated in a board meeting document. The property will include the development of 222 multifamily units and 13,966 square feet of retail space. The site for this development totals four acres, and it had been the home of existing retail structures that have been demolished.

The site was fully entitled when Rockpoint made its investment into the property. Fund VI will have a 95 percent ownership in the property while the other 5 percent ownership will be held by an un-named developer. The market return on the cost for the property is anticipated to be in the range of 5.75 to 6.25 percent based on un-trended market rents. The fund manager projects that it will exit ownership of the property in November 2023.

The other asset in the Bay Area that is now in Fund VI is the 378,705 square foot Treat Towers office building in Walnut Creek. The asset was acquired for $191.3 million with the equity amount investment into the transaction by Fund VI of $66.3 million. Rockpoint wrote in a board meeting document that this transaction was closed at a 30 percent to 35 percent discount to replacement cost.

Based on the asset’s strong existing and potential cash flow profile, Rockpoint acquired the asset with a going-in cap rate of 6.5 percent to 7 percent and a market return on cost of 7 percent to 7.5 percent. The property was 98 percent occupied at the end of 2019, and the fund manager expects to hold onto the property until October 2024.

Rockpoint has two other assets in Fund VI now. These are apartments and office assets that are located in the Boston area where the commingled fund invested a total amount of equity of $419.1 million.

Fund VI looks to invest in assets in Rockpoint’s primary targeted markets. These include San Francisco Bay Area, Southern California, Dallas, Boston, New York City and Washington, D.C./Northern Virginia. It mainly wants to buy office and apartment assets that can produce net IRRs in the range of 13 percent to 15 percent.

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