By Keith Loria, Contributing Editor
Dallas—Velocis has closed its second fund with equity commitments exceeding $270 million, bringing Velocis Fund II assets under management to $400 million.
The current equity commitments provide Fund II with $775 million in purchasing power, incorporating moderate leverage. Management anticipates raising an additional $50 million of co-investment equity from investors, giving Fund II approximately $920 million in purchasing power.
“Clearly, having a successful preceding fund is key. We continue to do quite well in Velocis Fund I,” Fred Hamm, Velocis managing principal, told Commercial Property Executive. “Additionally, we believe we have a very good balance of high net worth, family office and institutional capital. We exert great effort towards all three investor classes. We’re very appreciative of the support we receive from our investors.”
Velocis Fund II is pursuing a value-add investment strategy across 10 markets and four product types: traditional office, medical office, data center and retail properties.
“We will deploy capital in major secondary markets like Phoenix, Denver, Dallas, Atlanta, Charlotte, and the D.C. Corridor, to mention a few,” Hamm said. “Although our acquisition pipeline is always active, we will continue to be very judicious as we invest our capital over the next three years.”
Velocis Fund II has already deployed 27 percent of its capital with two office assets in the Phoenix/Scottsdale market; two office assets in the D.C. Corridor; and one data center in Charlotte, N.C.
According to Hamm, a core principle of Velocis’ investment strategy is proper diversification and it looks at a lot of deals and maintains strict discipline before committing capital.
“Markets and various classes of commercial real estate behave differently along the cycle. Optionality gives us the flexibility to pursue opportunities in multiple markets and multiple product types,” he said. “As a result of this approach, we’re not forced to make something happen in a ‘hot’ market. With years of experience and meaningful relationships across the U.S., we have the ability to source outstanding opportunities that fit our investment strategy.”
Joining Hamm as principals in Fund II are Mike Lewis, David Seifert, Paul Smith and Jim Yoder.