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PHILADELPHIA-BPG Properties Ltd. has launched BPG Investment Partnership Fund VIII LP, its largest real estate investment fund to date. The plan is to raise $650 million to $750 million for real estate acquisitions.
"Our $550-million Fund VII is 76% invested and we expect to complete the use of that fund within the next six months," Dan DiLella Sr., BPG's CEO, tells GlobeSt.com. "We already have commitments for Fund VIII and I believe it will be over-subscribed. Some investors are currently under-allocated in the real estate asset class."
The investments come from endowments, foundations, corporate and private pension funds and family trusts. DiLella says "the funds are generally leveraged two to one, two parts debt to one part equity so this one would provide for about $2.1 billion in acquisitions."
As with the previous funds, the newest one will be dispersed among the full gamut of commercial real estate property types nationwide. "We currently have properties in 28 states," DiLella says. They include multifamily, office, industrial, retail and hospitality.
The locally based BPG has offices in Chicago, Los Angeles and Washington, DC and multifamily management companies in Denver and Atlanta. That does not mean, however, that the company plans to limit acquisitions to those areas. "It depends on market conditions in each sector in all locations where we find product in which we can add value," DiLella says. "We buy and sell in every market."
In August, BPG entered Minneapolis with the $86-million acquisition of Interchange Office Park, a four-building, 936,000-sf complex. This month, it paid $8.7 million for a 58,266-sf office building in Rockville, MD.
BPG is an affiliate of locally based Berwind Property Group. It opened its first formal fund in 1991. "We had investors prior to that, but it was more of a clubby group," DiLella says. Since 1991, it has raised more than $1.5 billion and Fund VIII is expected to take the total well above the $2-billion mark.
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