Velocis Launches Fund II to Invest in U.S. Commercial Real Estate MarketJune 10, 2014
DALLAS – (June 10, 2014) – Velocis Fund LP, a Dallas-based private equity real estate fund, today announced the launch of its second fund, Velocis Fund II. This launch follows the success of Velocis’ first fund, which completed its final Closing in March 2013, and has performed beyond underwriting expectations. With a targeted equity capital raise of $300 million, Fund II will pursue similar office, medical office and retail properties in select U.S. growth markets, but will allow for larger asset purchases, possibly including portfolios.
“The Velocis team’s industry experience, relationships and our proven ability to unlock value in assets will provide our investors with unique opportunities in the U.S. commercial real estate market,” said Fred Hamm, Velocis Managing Principal. “We took a similar approach with Fund I, which allowed us to secure assets, create value and maximize the return for our investors.”
Velocis Fund II is targeting an equity raise of $300 million. Using moderate leverage of up to 65%, the Fund anticipates having purchasing power of $800 million. The Fund will target financially distressed or under-managed U.S. real estate assets in the $20 to $70 million range where Fund principals can unlock value. The Fund anticipates securing 25 or more properties over a three-year investment period. Potential investors include institutional investors, large family offices, and high-net worth individuals in the United States, Mexico and Europe.
Fund I is currently 76% deployed and has assets under management of approximately $305 million. “We currently have a few deals in the contract stage and anticipate having Fund I fully deployed by late Q3 of this year”, Hamm says. Fund I’s first two asset sales, The Jefferson and 7700 San Felipe exceeded initial goals. The Jefferson, a medical office building in Austin, Texas provided investors with a 30.4 percent net IRR and 2.02x equity multiple. Its second sale was 7700 San Felipe, an office building in Houston, Texas which provided investors with a 28.6 percent net IRR and 1.81x equity multiple for investors. As of Q1 2014, Velocis Fund I is currently up more than 25 percent on equity.
Velocis Fund II will be led by a team of five seasoned principals who are directly responsible for the acquisition, asset management and disposition of assets.
“Velocis’ team understands how to source, acquire, manage and add value to commercial real estate as well as any group of managers in the industry”, said Paul Smith, a new Velocis Fund Principal. Smith joins Fund II after serving as a Principal of Velocis Advisors, LLC. Smith goes on to say, “It’s critically important for managers to be able to execute, and as shown in Fund I, Velocis investors have clearly benefitted from the Velocis team’s 130 years of experience.”
Joining Fred Hamm and Paul Smith as principals in Fund II are Mike Lewis, Jim Yoder and David Seifert.
About Velocis, LLC
Velocis consists of two entities: Velocis Fund, LP and Velocis Advisors, LLC. Velocis Fund, LP is a private equity real estate fund, active in the acquisition, operation/management, and disposition of commercial real estate in the United States. Additionally, Velocis Advisors, LLC provides asset management and advisory services to both investors and real estate clients. Additional information about Velocis can be found at https://www.velocis.com/.
Past performance does not predict future results. This article does not constitute an offer to sell, or a solicitation of any offer to buy any securities of the Fund, nor is it intended to be a description of all material factors an investor should consider before investing in the Fund. Prior to making an investment decision, prospective investors should carefully review the offering documents of the Fund for a description of material factors to consider, including risk factors and investor suitability requirements.