Parmenter Closes Office Fund with $1B in Buying Power

By Barbra Murray, Contributing Editor

It’s not exactly chump change. Parmenter Realty Partners just closed Parmenter Realty Partners Fund IV L.P., its fourth investment fund, with $253 million in commitments, in addition to $51 million in co-investment capital. When leveraged, the fund’s total $304 million capitalization will allow for a $1 billion office property shopping spree.

Fund IV’s closing comes two years after its launch. The investment vehicle targets quality office assets with value-add opportunities. Among its recent purchases is Fifth Third Center, a 654,500-square-foot office tower in the central business district of Charlotte, NC. The fund picked up the property from Bank of America in June, relying on a $120 million financing deal orchestrated by CBRE Capital Markets. The Class-A office tower is presently 98 percent occupied; however, with Wells Fargo planning to leave behind approximately 100,000 square feet at the 15-year-old property in early 2013, the upside could materialize with the leasing of the space at higher rents.

Apparently, Parmenter is doing something right with Fund IV. It attracted more money and a more diverse set of investors than Fund III, which closed in fall 2006 with commitments totaling $245.5 million that provided the capacity to acquire $800 million of office properties. “Fund IV broadened our investor base to include more corporate and public pensions fund and offshore investors in addition to our traditional endowment, foundation, and family office investors,” said Andrew Weiss, COO of Parmenter. “The fund is performing well with a solid cash flow to our investors.”

Presently, Fund IV is distributing a 6 percent yield on invested capital.

Despite the economy’s slow crawl to recovery, real estate funds are attracting the big bucks. In July, Federal Capital Partners closed on FCP Realty Fund II L.P. with $529.2 million in hand. With buying power of $1.5 billion, the fund is well positioned to compete for the Mid-Atlantic office, multi-family, retail and industrial assets on its target list.