BPG launches a new real estate fund
The Center City firm has raised $850 million from 65 investors to buy properties for eventual resale.
BPG Properties, of Center City, one of the nation's largest private real estate investors, says it has raised $850 million for a new fund.
The closed-end fund, when combined with debt, will enable the company to invest about $3 billion in real estate, a top BPG executive said yesterday.
It is BPG's largest fund, with 65 college endowments, pension funds, private family trusts, and nonprofit groups as investors. The company has told investors it expects to earn a 14 percent compounded annual return with the new fund, said Daniel M. DiLella, president and chief executive officer.
BPG, the former Berwind Property Group L.P., will use the new fund to buy properties worth $15 million to $50 million that need to be renovated or repositioned in their markets. It then will resell the properties within five years of buying them, DiLella said. "There is always something that needs fixing," he said.
BPG Properties has three pending deals for the new fund, for real estate in Arizona, Florida and North Carolina, DiLella said. The fund will focus on apartment buildings, office complexes, industrial property and retail.
The firm, with about 150 employees in Center City, redevelops, operates and manages the property it acquires. Its property includes 25,000 apartment units and 20 million square feet of office, student housing, retail and industrial space.
BPG's first fund in 1992 had $26 million. As the company exhausts the money in its current fund, it organizes a new one. The new fund, with $850 million, is its eighth.
Earlier this year, BPG Properties bought 22 apartment complexes in Pennsylvania for $314 million from National Properties Inc., of Exton. It was BPG's largest deal and part of the seventh fund, which had $550 million in its initial investment and is winding down.
Funding Growth
BPG Properties has created successively larger funds for real estate investments. As the money in a current fund is exhausted, the company organizes a new one.
1992. . . $26 million
1995 . . . $65 million
1996 . . . $100 million
1997 . . . $165 million
1999 . . . $225 million
2002 . . . $384 million
2005 . . . $550 million
2007 . . . $850 million
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