Virtus Real Estate Raises $408M For Cycle-Resistant Strategy

Jul 20 2017 | 6:44pm ET

Alternative real estate specialist Virtus Real Estate has raised more than $408 million in capital commitments for its cycle-resilient opportunistic strategy, beating its $400 million target.

Of the total, $308.5 million is committed to the company’s new fund vehicle, Virtus Real Estate Capital II, LP, and $100 million to a discretionary separate account. The capital raise was launched in late 2015, according to the company.

The new capital will be invested consistent with Virtus’ existing approach, which concentrates on U.S. property types believed to sustain income streams and values even recession environments or during declines in general real estate values.  Examples of target property types include student housing, senior living, medical office buildings, self-storage facilities, and workforce housing – all of which benefit from major long-term demographic, social and economic trends, and which enjoy consistent demand regardless of the overall economy’s condition.

Fund II has already made 12 property investments across six states totaling $116.5 million of equity, the company added. 

“Exceeding our fundraising goals is a testament to the strength of our investment value for both institutional investors and high net worth individuals,” said Terrell Gates, founder and CEO of Virtus, in the statement. “Our stakeholders trust Virtus as a tested manager who has and will continue to deliver high quality returns across all market cycles.”

“Knowing which deals to avoid is equally as important as knowing which deals to seek,” added CIO said Robert Schweizer. “Likewise, it pays to be hands-on and more local in these more operationally intensive property types.” 

Founded in 2003 and headquartered in Austin, Texas, Virtus Real Estate Capital concentrates on non-correlated alpha generation via cycle-resilient real estate.  Over the last 14 years, Virtus has acquired 200 properties for a combined acquisition value of over $3.2 billion, and has fully realized 157 property investments. 

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