Rusty O. Perry, managing partner of Dallas-based Vintage Interests, says the first fund's $20 million of equity was used to acquire $75 million of two million sf of industrial assets in Austin and Dallas/Fort Worth in 18 months. The second fund will be used to acquire properties in San Antonio and Houston too.
Perry tells GlobeSt.com that Vintage Fund II will mirror the buying habits of the first one, but is being backed by a different high-net worth family from Dallas. "Every day brings a new opportunity, but for us the key to success is our ability to move quickly. We've found that with private capital, and on one investor, it's much easier because we have discretionary capital that we can move quickly on." The strategy is to secure the deed with a 30-day inspection and a "cadre of lenders" to cover debt needs, he says.
[IMGCAP(2)]Vintage Fund II's first real estate is a 107,915-sf office/warehouse at 1541 Champion Dr. in Valwood Industrial Park in Carrollton and a 50,580-sf warehouse at 2682 Brenner Rd. in Dallas' North Harry Hines submarket. Natures Formula Inc., a local firm, holds a long-term lease for the Valwood building while the second one closed as a long-term sale-leaseback with Bargain Distributors of Dallas. In all, Vintage deployed about $7 million, leveraging the deal at a 70% to 75% loan to value.
"In both cases, we feel we bought good, functional assets at significant discount to replacement cost," Perry says. The Carrollton building, constructed in 1986, sits on 4.5 acres. The Brenner Road building rose in 1963 on a 1.9-acre tract.Perry says the plan is to assemble a mix of stabilized and value-add properties into one portfolio. "We buy some at premium yields and some true value-added buildings that require significant lease-up or repositioning," he says, adding the first fund's portfolio is now boasting 93% occupancy.
The acquisition sweet spot is 50,000 sf to 200,000 sf in the $3-million to $10-million deal range. And, Perry says he fully expects the second fund, like the first, will be 100% invested within 18 months.
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