Puerto Rico-based investor Grupo Ferré Rangel has launched real estate investment platform Kingbird Properties to invest in value-add real estate opportunities in secondary US markets and in Latin America. The wholly owned subsidiary of Grupo Ferré Rangel consolidates the firm's real estate investments under one entity. Kenneth A. Munkacy will serve as Senior Managing Director of the new company, while Grupo Ferrè CEO Antonio Luis Ferré Rangel will serve as the CEO and chairman of Kingbird. The firm announced its launch at the Urban Land Institutes Fall Meeting this week in Los Angeles.
“In the US, we will be focusing on secondary and tertiary markets, or what I call markets that don't appeal to institutional investors as much,” Munkacy tells GlobeSt.com. “We are looking at low- to mid-rise structures that are 150 to 400 units, and we would like opportunities to enhance rents through capital improvement programs. We are targeting local partners to do project management, leasing and capital improvement capabilities that have a track record in turning around under performing or troubled projects and that are hands on. We are not going to be a vertically integrated company.”
Grupo Ferré Rangel is primarily a media company, but has invested in real estate periodically as part of diversifying its holdings. “They came to appreciate real estate's growth opportunities, the yields and the risk-reward profile,” says Munkacy. “They analyzed real estate as a way to diversify their portfolio holdings, and they concluded that it is worth consolidating everything under a new entity, which is Kingbird.”
Munkacy says that the firm will likely build a portfolio of 5,000 units over the next “couple of years;” however, it doesn't have specific goals in terms of deal allowance or capital placement. In general, its business plan is property and deal specific.
Our parent company has been in real estate for many years; it is tan gentle to its core business. “We are a long-term owner and holder,” explains Munkacy. “We are not committed to a seven-year fund life where you have to raise money, spend it and harvest it in the seven year timeframe. We will live through multiple cycles and spend it at the appropriate time. We are putting together a portfolio that generates good cash flow and captures appreciation over a couple of cycles.”
Kingbird will serve as the equity partner in each investment, and will partner with local operators that will execute the business plan. In general, Kingbird will place 90% of the capital, securing debt at an average 60% to 70% loan-to-value, and will partner with other family offices for the remainder. “We are not only bringing our capital to the table, but will also partner with family offices that are associated with our parent company,” says Munkacy. “We will primarily be an investment management platform, and we will work with local partners that will be in charge of the day-to-day.”
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Kelsi Maree Borland
