Grosvenor Residential Investment Partners I, L.P. (GRIP), sponsored by Grosvenor Investment Management (GIM) of Philadelphia, PA and Key Real Estate Equity Capital (KREEC), an affiliate of KeyCorp of Cleveland, OH, has announced the financing of three “for-sale” residential projects in Oregon, California and Texas.
GRIP is a private partnership that invests in “for-sale” residential projects and associated debt across the United States. Investments may be made in the form of senior participating debt, mezzanine debt or equity. These transactions represent the fifth, sixth and seventh investments for the $100 million fund, which is now approximately 37 percent invested.
The fund provided a $7.5 million mezzanine loan for the acquisition and completion of site work on 96 single-family lots in Portland, Oregon. The borrower, West Hills Development, is the largest private builder in the Portland market. They will finish the site work and then construct single-family homes on the lots. The lots are in the Beaverton submarket, approximately five miles west of downtown Portland in an area which is in close proximity to major employment centers and where the borrower has ample experience developing.
The fund then provided a $4.3 million mezzanine loan to assist in the recapitalization of 41 lots and three furnished model homes in Vista, California. The borrower, Watt Companies, is a Los Angeles-based developer/owner with substantial real estate holdings on the West Coast, both commercial and residential. They will build out the rest of the community and market the newly-constructed (and existing model) homes for sale. The project is the only new subdivision in the city of Vista, which is approximately 40 miles north of downtown San Diego.
The fund also provided a $2.7 million mezzanine loan to acquire and complete the land development of a 1.02-acre parcel in Houston, Texas. The borrower, Pelican Builders, is a local residential developer who plans to construct 16 patio homes on the site, an infill location in close proximity to the Galleria Mall. The fund had been targeting the Houston market due to its strengthening economy, low unemployment rate and solid population growth.
“With these investments, the fund has now completed seven transactions and is approximately 37 percent invested,” said David Reiner, Managing Director of GIM. “Our goal for the fund has always been to assemble a diversified portfolio of residential investments that produce attractive risk-adjusted returns. These transactions have pushed us closer to achieving that goal. The fund has been able to take advantage of pricing inefficiencies and to provide capital to an underserved segment of the market.”
“All of these investments meet the fund’s criteria of investing with high-quality sponsors, in infill locations and in strong, growing markets,” added John Hay, Director of KREEC.