CHICAGO-HSA Commercial Real Estate and Innovative Capital Advisors, both based here, have partnered to create a new investment fund. The venture has launched ICA Real Estate Equity Fund, a $50 million fund that will seek Midwest properties.
Tim Blum, EVP with HSA, and Peter Mavrogenes, senior managing director and CEO of ICA, will both manage the fund. They are both principal investors in the fund’s first installment, with a series of funds following in the next five to 10 years as the partnership continues to attract capital.
The venture is seeking assets valued at less than $10 million in all property types except hospitality. The fund is focused on existing, income-producing properties located within high-barrier-to-entry infill markets.
The two partners said in a statement that the size and structure of the fund allows response to opportunistic investments that larger, institutional funds typically ignore. “With the fixed-income market in its current lackluster condition, many of our institutional clients, like insurance companies, are turning to real estate to generate growth in their investment portfolios,” Mavrogenes said. “Right now, the best way to create substantial returns in real estate is through equity in the types of core assets we are pursuing with this fund.”
Innovative, formed in 2003, has originated more than $350 million of loans in 41 states. At HSA, the company has developed and acquired more than 50 million square feet of commercial real estate across the United States.
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