By Jon Peterson
West Hartford, Conn.-based Penwood Real Estate Investment Management continues to have its eye on the Southern California market. The firm just recently raised a total of $382 million for its latest commingled fund that goes by the name of Penwood Select Industrial Fund VI, according to sources familiar with the capital raise, and the Southern California region will be one of the two areas where these funds will be allocated.
The remaining portion of the fund will look for investment opportunities across the Northeast part the country, where, along with Southern California, the company will seek only investments in industrial properties. The biggest impact on the decision to focus on these two markets is the manager’s understanding that these two regions are very supply-constrained, and they have historically had an attractive investment climate.
Just over 26 percent of the capital raised by Penwood came from a single institutional investment. This was a $100 million commitment from the State of Wisconsin Investment Board, according to a board meeting document from the investor. The pension fund had invested with Penwood many times in the past, which is an important aspect of SWIB’s approach to investment. The fund wrote in an email that “Re-investing with proven managers is an important part of SWIB’s strategy.”
Penwood did not respond to both emails and phone calls seeking comment for this story.
Fund VI is a commingled fund with a value-add investment strategy. This will include the acquisitions of existing assets, redevelopment and development of new projects. It is expected that the transactions for the commingled fund will be sourced directly and through the preferred relationships Penwood has established with its select group of operating partners.
Penwood earlier this year did acquire an asset in Southern California for Penwood Select Industrial Partners V, according to industry sources. It purchased the 285,456 square foot Redlands Corporate Center I and II in Redlands. The new owners are now in the process of investing additional capital into the property to reposition the property as a cohesive and traditional industrial business park. The asset has a total of 10 buildings that range in size from 18,500 to 39,000 square feet.
