Advisor aims to spend $800 million

Real Estate Alert, March 17, 2004

General Investment & Development, an old-line real estate player based in Boston, plans to invest $800 million in apartment and office properties this year through separate ventures with three large pension plans.

The firm expects to invest $650 million in apartment complexes with Calpers and California State Teachers, plus $150 million in office buildings with DuPont's corporate pension fund. General Investment would provide 10-20% of the equity for each investment.

The purchases will be made through vehicles in General Investment's Windsor Really Fund series. Calpers is participating in Fund 3, Dupont in Fund 4 and CalSTRS in Fund 5. General Investment hopes to spend the money this year and may receive additional commitments from the three players for acquisitions in 2005.

General Investment has full discretion over acquisitions. The two apartment ventures will concentrate on core and core-plus properties, while the office venture will also seek value-added properties.

The apartment ventures will target individual properties with at least 200 units, as well as portfolios. They will invest in Class-A and -B properties--both garden-style communities and high-rises--and will consider complexes that are under development, underperforming or in need of renovations. Some of the investments could be made through joint ventures with developers or other players.

The Calpers fund plans to buy $400 million of properties in a handful of markets in the Eastern half of the U.S.: Atlanta, Boston, Chicago, Minneapolis, New York, Northern New Jersey, Philadelphia, South Florida and Washington. Calpers and General Investment have jointly bought more than $900 million of properties since 1997.

CalSTRS has committed $75 million of equity to its fund, which is expected to buy $250 million of apartments in Austin, Dallas, Denver, Houston, Portland, Salt Lake City, metropolitan San Francisco, Southern California and Seattle.

The Fund that involves DuPont has already made $50 million of purchases and is seeking to buy another $150 million of suburban and downtown office and office/flex properties that encompass at least 100,000 stand are less than 15 years old. It will consider properties with vacancies or space available for sublease, as well as redevelopment opportunities. The target markets are: Atlanta, Boston, Chicago, Los Angeles, Miami, Northern New Jersey, Philadelphia, San Diego, metropolitan San Francisco, Tampa and metropolitan Washington. Individual investments will range from $20 million to $50 million. General Investment and DuPont will consider teaming up with other players.

This is the second co-investment for Dupont and General Investment. Windsor Realty 2 acquired 39 suburban offices from 1995 to 1997, and in 1998 sold the portfolio to Glenborough Really of San Mateo, Calif., for $420 million.

General Investment, which was founded in 1960, has developed or acquired 5.9 million sf of office and industrial space, plus 25,000 apartment units. Its portfolio currently encompasses 2.3 million sf of office and industrial space and 15,000 apartment units. The firm's contact for apartment transactions is Rich ROSS at 415-464-4930. For office deals, call Thad Palmer at 617-854-6634.