Virtus Real Estate, an Austin, Texas-based private equity firm, has just launched a $500 million fund called Virtus Real Estate Capital LP that will combine all four of its preferred property types, including self-storage, student housing, senior housing and medical offices.
Director of Business Development Kevin White said 25 to 35 percent of the fund will be allocated toward self-storage. The fund's investments will focus on U.S. Sun Belt markets but will have a nationwide presence.
In the past, the firm has focused solely on signal-asset funds, including its four self-storage funds. With Virtus Real Estate Capital's new fund, no more than 40 percent of leveraged equity will go to any asset class. The fund's investors will pursue an income-plus-growth-through-value-added strategy by making off-market, opportunistic acquisitions and recapitalizations. Capital deployment will be required to happen over the next two to three years. The fund's final closing is projected for Dec. 31, 2013.
Since its inception in 2003, Virtus has acquired $1.6 billion in real estate assets, including more than $100 million in self-storage. The firm targets recession-resilient asset types in which demand is driven by demographic information.