Hillwood’s New $400M Fund

Hillwood Investment Properties’ new $400M fund will likely venture into up-and-coming industrial markets like Austin, Orlando, Salt Lake City, Phoenix, and Reno in addition to the usual NFL cities (we assume it will perform better than the Texans this season on those visits).

The fund is a partnership with an unnamed sovereign wealth fund. (The most popular baby name in 2013 was Sophia... so that's our guess.) Hillwood Investment Properties EVP Tom Fishman tells us this is Hillwood's second effort with this sovereign fund (the last one was '11). It will target industrial real estate that serves strategic distribution needs. The fund will seek quality industrial buildings that are 100k SF with a minimum deal size of $5M. Acquisitions will include single-tenant or multi-tenant properties, portfolios or individual buildings, he says. Investments can include core-plus, value-add, and opportunistic. A unique feature is the inclusion of development (spec or build-to-suit) as well as ability to team up in JVs. With 60% to 65% leverage, the goal is to invest slightly more than $1B over the next four years.

Tom's team: Nawder Alavi, Louis Bauer, and DJ Meagher (not pictured: Kina Aziewicz and Alan Peters). Tom tells us there's strong international interest in US industrial real estate and there's more capital allocated now for the asset class because of its strength during the last economic slowdown. Another reason: the positive absorption and slight uptick in rental rates, a result of building modestly and tempered development, Tom says. Tom's good at tackling challenging jobs. For Thanksgivukkah, he and his wife hosted 18 people at their house. After surviving that, what's left for the rest of the year? He tells us he plans to spend more time with his daughters and watch Ole Miss (his alma mater) take down Georgia Tech in the Music City Bowl.