Commercial mortgage lending specialists, Innovative Capital Advisors (ICA), has partnered with Chicago-based HSA Commercial Real Estate, a full-service real estate firm, to launch “ICA Real Estate Equity Fund I”, a $50 million investment fund seeking acquisition opportunities throughout the Midwest.
The fund, which recently closed, is being managed by Peter Mavrogenes, senior managing director and CEO with ICA, and Tim Blum, executive vice president with HSA, both of which are finance and real estate veterans and principal investors for the fund’s first installment.
The fund managers are seeking real estate assets under $10 million in all property types (excluding hospitality) in Metro Chicago and second-tier markets throughout the Midwest. They are focused on existing, income-producing properties located within high barrier to entry, in-fill markets. HSA Commercial Real Estate will provide expertise in acquisitions, finance, management, leasing, and due diligence for these properties.
“With the fixed income market in its current lackluster condition, many of our institutional clients, like insurance companies are turning to real estate to generate growth in their investment portfolios,” said Mr. Mavrogenes in a release. “Right now, the best way to create substantial returns in real estate is through equity in the types of core assets we’re pursuing with this fund.”
The partnership is planning a series of funds to be implemented in the next five to ten years as the group continues to attract capital from insurance companies, pension funds, and high net worth investors.
“Our size and structure allows us to respond to opportunistic investments that larger, institutional funds typically ignore,” said Mr. Blum. “That allows me to take a more all-encompassing approach to my search for investment properties on behalf of the fund.”