"We will execute cutting edge investment and development strategies in targeted, robust urban communities across the United States. This is the niche for which UrbanAmerica is known and to which we are committed," says Richmond S. McCoy, president & CEO of UrbanAmerica.
McCoy tells GlobeSt.com that partnering with Fisher was a natural extension of work the pair had teamed on for Fund I. "We got along well. This allows us to each capitalize on our strengths." This fund will focus on housing because "there is a strong demand for quality housing. We'll make this an efficient process. We can control it all."
The nationally focused Fund II is a value-added offering, projecting mid-teens returns to investors that with leverage, is set to develop and acquire a $1-billion portfolio. Fund II will focus its energies on additional investment and development opportunities, of much larger size including its existing "life sciences" niche, office product retail and residential developments.
McCoy also notes that the venture will take the company to new locales including its entrance into the Texas and California markets. Dade County, FL is one area the venture is paying particular attention to. Fund II will not invest in New York City. Fisher Brothers' development affiliate, TerraMark, and its construction affiliate, Plaza Construction, will play key roles in the Fund II strategy by providing development and construction expertise in executing ground-up development and renovation programs.
With its Fund I, UrbanAmerica acquired a $330-million portfolio consisting of office and retail in major urban markets such as Washington, DC, Atlanta, Tampa, Miami and Tallahassee, FL, Philadelphia and Detroit. These properties had an average value of $12 million. Investors in Fund I include Lacera, Nationwide Insurance, Citibank, Washington Mutual, MBNA, PNC Bank, Heron Foundation, Wachovia and others. According to McCoy, most investors are participating in Fund II.
UrbanAmerica, founded in 1998, owns and operates a portfolio of 28 properties consisting of 3.7 million sf. UrbanAmerica is an African American-controlled organization that funnels institutional dollars into previously neglected communities and investment opportunities, helping to create jobs by employing local vendors to service its properties.
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