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Steve Furnary |
Clarion Partners is preparing to launch its first non-traded real estate investment trust. The New York-based investment management company is in the pre-launch phase and hopes to roll out the REIT in the next three to six months. "It's clear that real estate is an asset class that has been well-received by the public as an alternative investment with attractive characteristics like less volatility and low correlation with stocks," said Stephen Cordes, managing director.
Earlier this month, Clarion completed a $100 million management buyout from ING in a partnership with Lightyear Capital. Clarion, which has invested via a series of private equity funds and separate accounts, is focusing on broadening its investor base from its traditional group of institutional investors. "We've been taking our core competency and moving into different distribution channels," said Stephen Furnary, ceo.
The planned REIT will invest in core properties in primary markets on the coasts, the Midwest and Southern U.S. Clarion is targeting a portfolio of $750 million to $1 billion over the first three years. In addition to acquisitions, it would also make preferred equity and debt-to-equity plays, Cordes said. The REIT will be managed by Ed Carey.
Broadly, Clarion has been making low-leverage acquisitions of less than 50% loan-to-value in all assets types with a focus on core investments. Activity has been mainly in coastal markets, Furnary said. Clarion's portfolio consists of 1,200 properties nationwide.