The Heritage Group Forms Discretionary Real Estate Fund

SAN DIEGO – San Diego-based The Heritage Group has launched its first fund product, The Heritage Core Value Fund.

The real estate firm is planning a $50 million equity raise for the Core Value Fund. With leverage in place, the company expects a total capitalization of the fund to be in the range of $100 million to $125 million. Target investors in the Fund will include a mixture of high net-worth individuals, family offices, trusts and Registered Investment Advisors.

“Based upon our growth as well as the success we have had making individual investments for our current clients, a discretionary Fund product is a natural addition to our platform,” said Mark Hoekstra, managing director with the Heritage Group.

Besides San Diego, Heritage plans to expand their hold in the Los Angeles and San Francisco markets by adding 10 to 12 properties in its new commingled fund, with the deal size ranging from $5 million to $20 million. The company is interested in buying assets that are located both in downtown and suburban locations.

“We will focus on acquiring existing assets with a value add component to them,” said Rocco Cortese, managing director at the Heritage Group. “Some examples of this are historic office buildings that we convert into creative office space.  We have completed a few creative office conversions in San Francisco and Los Angeles so we want to build on that success. We will also target specialty retail properties that provide that experiential shopping experience which helps mitigate the Amazon effect that is challenging many of the Big Box centers and shopping malls.”

The investment company is looking at properties that can achieve leveraged IRRs in the range of 13 percent to 15 percent. The leverage placed on the fund will be on a 65 percent loan-to-cost basis. The company looks to hold onto assets for three to five years.


Leave a comment

Your email address will not be published.Field is required

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

 Previous  All works Next