(Carl Cronan is editor of Real EstateFlorida.)
MIAMI-Locally based Parmenter Realty Partners is getting set to establish its fourth fund with the aim of acquiring approximately $2 billion worth of commercial properties, including South Florida multifamily assets. The real estate investment and management company has set a target of $500 million in equity commitments.
A company news release states that nearly all of its partners in a previous fund have indicated they will reinvest in Parmenter Realty Fund IV, with many increasing their allocations, adding that the first close is expected in September. Parmenter Realty executives were not available for comment Friday, a company spokeswoman informed GlobeSt.com.
Parmenter Realty, which was established in 1989, cites a strategy of "investing in distressed and/or undermanaged infill office properties in the Southeast and Southwest," using its acquisition and development skills to add value to the properties it buys. For its latest fund, the firm states that it will consider investments into South Florida's multifamily properties, which have been besieged with tens of thousands of vacant condominium units and projects seeking bankruptcy protection.
The correction in the debt markets over the past year will create more opportunities for value-add investments than have been available in the last several years, according to Darryl Parmenter, president and CEO of Parmenter Realty. "These price corrections are taking place while the office real estate market remains generally sound from a supply and demand perspective, mainly due to the high cost of building assets," Parmenter stated in a release.
Not explained in the release is how Parmenter Realty aims to acquire commercial properties at what amounts to 75% leverage, based on its $500-million target. Experts stated as recently as last week that most banks will only consider financing deals at a maximum 65% loan-to-value ratio.
"There is a lot of liquidity on the sidelines," Raul Valdez-Fauli, president and CEO of CNL Bank in Coral Gables, said during an International Council of Shopping Centers conference in Kissimmee on Aug. 18. "You can still get deals done, but it's not going to be at 95% financing."
Parmenter Realty, which has regional offices in Dallas and Atlanta and owns properties in Florida and four other states, made the biggest office acquisition on record in Nashville, TN, earlier this summer, paying $84.8 million for the 27-story City Center building. The acquisition put the aggregate value of its Fund III to more than $550 million.
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