Pennybacker Capital LLC is the new name for N3 Capital Partners LLC, which will move from Fort Worth to Austin in October. The lead principal is Tim Berry, who co-founded N3 Development Ltd. and sold his interests to Netherlands-based United Investment Co. in July 2007. Pennybacker's other principals are George P. Bush, nephew of President George Bush and a former attorney for Akins, Gump, Strauss, Hauer & Feld LLP in Dallas; Vince Reyna, a certified financial analyst formerly with CIT Corporate Finance; and Michael O'Malley, a CPA who most recently was COO and CFO of VisionWeb Inc.
Berry tells GlobeSt.com that the $250-million investment plan is an "internal goal" that has been accomplished by picking up additional equity to expand the $30-million N3 Opportunity Fund I, which will be fully invested by year's end.
Berry says Pennybacker is backed with funds from institutional-quality family offices, mostly Texas with some capital rolling in from the Northeast. The investment route runs from Phoenix to Florida, staying below the Mason-Dixon line.
"We're not in the market to be vultures, but we're seeing an opportunity to provide liquidity to proven developers," Berry says, adding the team looks at $80 million to $100 million of investment opportunities each month for its ready-to-go capital.
To date, Pennybacker has pumped $10 million of equity into two projects, a mixed-use in Central Texas and the 500,000-sf Decatur Crossroads, a 65-acre project along US Hwy. 380 in North Texas, which is on the drawing board of Dallas-based Retail Connection LP. Berry estimates the two developments represent nearly $80 million of build-out value.
Berry says the team's "being really patient in this uncertain market" while it sizes up equity buy-ins from $1 million to $20 million for three to five-year holds. The criteria are quality sponsorship and irreplaceable locations for office, industrial, retail, mixed use and multifamily assets in addition to land plays. The pipeline includes buying senior notes to recapitalizations. "We have the ability to do the entire capital stack," he says.
Pennybacker has leased an office in Austin's Chase Building at 221 W. Sixth St. The team of seven will grow to 11, maybe an even dozen, within one year, according to Berry.
The relocation from Fort Worth doesn't mean that Pennybacker is completely severing its ties to United Development, now led locally by Berry's co-founder Jason Keene and Biff McGuire. "We have invested in their projects and hopefully will continue to invest in their projects," Berry says.
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