Texas Real Estate Investors Form State Fund
The State of Texas Real Estate Fund LP plans to raise $150 million to acquire commercial properties within the state.
The fund, which was developed by long-time real estate investors Mark Jordan and Kevin White who will serve as its managing directors, will primarily target high quality distressed office, industrial and raw land in Austin, Dallas, Houston and San Antonio.
The two partners said they decided to target real estate in Texas because the state’s economy is growing at a rate of 4% a year, which is four times faster than the rest of the country. A recent Forbes survey ranked the best cities for new jobs and Texas cities took the top five spots.
Last year, Houston added 260,000 jobs, while New York, which has three times the population of Houston, added 96,000 jobs.
“STXRE will focus on a niche that is overlooked by most institutional investors,” Jordan said. “We’re not buying the fully leased buildings that are being chased and bid-up by everyone. We’re buying great properties that are in distress. We then improve occupancy and sell within two to three years. This is a pure capital gain play and that successful formula is the reason four our IRR performance in the past. We expect that STXRE will deliver to investors an IRR of 20% to 22% after expenses.”
White said the firm is speaking to investor groups in the United States, Asia and Europe.
“The weakening dollar has given foreign investors leverage in purchasing U.S. real estate,” White said. “Last year alone, the Chinese yuan strengthened 3.3% against the U.S. dollar.”
Jordan is the owner of JP Realty Partners Ltd and Sooner National Property Management. He has over 20 years of real estate experience in the Texas market and has completed over $700 million in transactions.
White is the CEO of KGW Real Estate and KGW Capital Management. White has worked in the industry within the state for 14 years and has managed over $300 million in international client investments.