Realstar has substantial balance sheet resources and invests founder capital in its assets.
Joint ventures form an important element of Realstar’s success. Realstar often enters joint ventures with both large financial investors such as pension funds, endowments and family offices or strategic operating partners who require additional capital and/or expertise to complete a transaction.
In addition to its own corporate balance sheet and traditional joint ventures, Realstar also operates several discretionary co-mingled investment partnerships as well as single-partner co-investment structures.
Realstar Apartment Partnership I, II & III
Realstar Apartment Partnership is a series of investment vehicles in which the principals have partnered with a group of Canadian pension funds and select HNWs to acquire both existing and new build properties across Canada on a long-term ‘evergreen’ basis. The vehicles have total equity commitments of $750 million with total assets of $1.2 billion and over 5,500 units acquired to date and an anticipated $2 billion of assets following full deployment of the capital. The portfolio locations range from Victoria, British Columbia on the west coast to Halifax, Nova Scotia in the east and every major market in between. The partnership acquires both existing as well as new build – forward purchased – assets.
Manufactured Housing Partnership I, II & III
Realstar partnered with a major Canadian financial institution in fund I to acquire over 2,000 ‘pads’. It continued to acquire an additional 3,000 pads in funds II and III. At present, Realstar continues to acquire additional units on a property-by-property basis to be held for the long-term.
Realstar European Capital I, II & III
Realstar European Capital I (‘RECAP I’) was formed in September 2008 to seek out investment opportunities which resulted from the financial crisis. RECAP I acquired several residential blocks in Central London at material discounts to their “break-up” value. As the economic recovery took place and opportunities to acquire existing individual buildings dissipated, RECAP began focusing on acquiring properties to hold on a long-term basis for income.
After RECAP I, the structure evolved into a long-term hold ‘evergreen’ structure, thus has the advantage of being long-term, patient capital which does not require typical opportunity fund returns while at the same time is able to act quickly and decisively in the way that entrepreneurial opportunity funds often do.
At present RECAP II and III own over 1,000 residential units, primarily in London including London’s tallest rental tower as well as a new boutique hotel near the Tate Modern museum in South London.
Realstar Healthcare Partnership
Realstar Healthcare Partnership was the firm’s first UK investment in 2002. The GP surgery/ primary healthcare sector was under-appreciated in two key regards. In our view, property values were too small for large investors yet too large and ‘quirky’ for private owners; and we felt that the market misunderstood the covenant, both in terms of its yield versus other government credits and its rental growth prospects.
Over a 3-year period, we acquired one of the country’s premier and most sizeable portfolios. We held the portfolio for nearly 15 years and recently sold it in its entirety to a large PLC investor.