Category: Featured News

Dallas-based private equity fund manager Velocis broke ground on the Batavia Logistics Center, a 543,603-square-foot state-of-the-art cross-dock warehouse in the Fox Valley submarket west of Chicago.

The development is a partnership with SCOA Real Estate Partners (SREP), a fully owned subsidiary of Sumitomo Corporation of Americas. The project marks the fourth industrial development between Velocis and SREP in the past two years. A team of brokers led by Ryan O’Leary from KBC Advisors serves as the exclusive leasing agents.

“We are very proud to be partnering with SREP in developing this state-of-the-art facility within the critically important Chicago industrial market,” said Fred Hamm, Velocis Co-Founder and Managing Partner.

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The fund will acquire limited partnership interests in real estate through the private secondary market.

Velocis has closed its latest fund, Velocis Secondary Partners III, which raised more than $170 million, exceeding its target by more than 70%.

The fund will acquire limited partnership interests in real estate funds and real estate assets through the private secondary market. The fund’s partners includes corporate pension funds, insurance companies, endowments, foundations, registered investment advisors, family offices, and high-net-worth individuals.

Velocis Secondary Partners III is expected to invest in a wide range of real estate property types, including industrial, multifamily, office, retail, data centers, hospitality, life science, medical office, senior housing, and single-family residential properties in the U.S., Asia, Europe, and Latin America. The fund’s strategy is to acquire limited partnership interests at favorable prices from sellers in need of liquidity.

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Private equity real estate fund manager Velocis has closed on its latest fund after raising more than $170 million, exceeding its target by more than 70% and putting it in a position to buy a stake in real estate in high-growth markets throughout the world.

The Dallas-based firm’s newly raised fund, Velocis Secondary Partners III, gives it capital to acquire limited partnership interests or stakes in real estate funds and assets through the private secondary market, in which another investor sells a stake in its existing funds and assets. Like other real estate investors, Velocis has a history of investing in high-growth cities throughout the United States.

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Investment manager Velocis has held a final close on $172 million of equity for its third fund targeting secondary-market real estate investments.

The Dallas-based fund operator wrapped up its capital campaign last week for Velocis Secondary Partners 3, above the vehicle’s $100 million to $150 million target. The unleveraged fund
is roughly 20% invested. Velocis doesn’t use a placement agent.

Fund 3 aims to produce an 18% return by investing in operator- and limited partner-led recapitalizations of funds and property portfolios. The dislocated capital markets are likely to provide investment opportunities as owners and vehicle managers hampered by the recent runup in interest rates seek liquidity.

The fund focuses on the U.S., with 80% of its equity set to be invested there, but it can also invest 10% apiece in Asia and Europe.

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NASHVILLE, TENN. — Velocis, a private equity real estate investment management firm, has recently completed the $15 million renovation of Two Eleven Commerce, a 233,341-square-foot office building located at 211 Commerce St. in downtown Nashville. Velocis purchased the 11-story office tower in spring 2020 with Lincoln Property Co., the third joint venture between the two Dallas-based firms.

Built in 2000, the office building’s renovations include a two-story lobby with a new glass entry portal, contemporary conference center, integrated tenant lounge with indoor/outdoor seating, onsite catering kitchen and a fitness center with full locker rooms and showers. Other improvements throughout the office tower include upgraded and modernized elevators and elevator bays, exterior paint, new windows and a new gateless entry parking system in the building garage.

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Velocis, a Dallas-based private equity real estate manager, acquired the two-building Research Square at 1500 & 1550 Research Blvd. in the Shady Grove submarket of Rockville in a joint venture with Arlington, Virginia-based Altus Realty.

The acquisition includes 89,640 square feet of office space across two buildings on 7.45 acres, just west of Interstate 270. The Shady Grove submarket is the most sought-after biotech cluster within Maryland’s nationally recognized life science market. The traditional office space will be converted to life science and lab space, with construction scheduled to begin in January 2023.

This submarket consistently ranks as one of the top life sciences clusters in the U.S. The region is home to the headquarters of many distinguished national public health research and regulatory agencies including the National Institutes of Health (NIH), US Pharmacopeia, the Biomedical Advanced Research and Development Authority (BARDA) and the U.S. Food and Drug Administration (FDA), to name just a few.

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Velocis recently purchased two multifamily assets, Highline, a 208-unit multifamily community in San Antonio, and Station 40, a 246-unit multifamily community in Nashville. Highline and Station 40 are Velocis’ third and fourth multifamily assets. Velocis also owns multifamily assets in Charlotte and Austin.

“San Antonio and Nashville continue to be top job markets, and both are seeing excellent population and economic growth. We believe the San Antonio to Austin corridor will continue to see robust growth, as will Nashville,” said Jim Yoder, partner. “Multifamily is one of the most dynamic sectors in the real estate industry. Both assets provide value-add opportunities and are poised to achieve strong rent growth.”

Built in 2000, Highline is located 10 minutes east of the University of Texas at San Antonio and across the street from the new University Village mixed-use development. Once completed, University Village will span 114 acres, and include 320,000 square feet of office and 119,000 square feet of retail, all walkable from Highline.

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Partner Paul Smith offers a full picture of the company’s recent decision to enter new territory.

As online shopping transitioned from “an option” to “first choice” for many end clients in the past few years, demand for space has skyrocketed. An increasing number of companies continue to enter the booming industrial sector and developers are barely keeping pace.

According to CommercialEdge data, almost 500 million square feet of industrial space was under development across the country as of July, with the Dallas-Fort Worth market leading the way, with 32.6 million square feet under construction.

Last month, Velocis kicked off its entry into the industrial sector with the acquisition of two development sites in the Dallas area. The company teamed up with Sumitomo Corp. of Americas to develop 850,000 square feet of Class A industrial space in the South Dallas and the Great Southwest submarkets of Texas. Partner Paul Smith offered Commercial Property Executive an in-depth view on the strategy behind this move.

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For its first Nashville project, a Dallas-based real estate company bought an office building in the heart of downtown Nashville, with plans for significant renovations.

In a joint venture with Lincoln Property Co., Velocis bought the 232,194-square-foot complex at 211 Commerce Street. The purchase price wasn’t disclosed, but sources with knowledge of the deal said the figure was around $50 million.

Velocis is also putting $13 million into refurbishing the structure, which ranks among the largest downtown office buildings, according to Nashville Business Journal research. Construction is expected to start within 90 days and wrap up by year’s end, said Jim Yoder, a founding partner at Velocis.

“We think Nashville has become a haven for technology and financial services and maybe somebody who’s looking for a little more hip environment, and so we’re going to try to create that,” Yoder said.

This is Velocis’ first buy in Nashville. But the Texas-based firm has a significant stake in Austin, another popular tourist destination, and has been scouting Music City for a year or so trying to find the right project, Yoder said. He lists similarities between the two cities’ dynamics and energy, along with Nashville’s strong entertainment business, as attractions.

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