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6/17/21
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Base Equities, a Los Angeles-based private equity firm that specializes in providing preferred equity to established sponsors in commercial real estate assets across the United States, has launched its new fund, Base Preferred Equity Fund I, targeting $50 mil in commitments.
According to Michael Bastan, a Co-Founder and Principal of Base Equities, the fund will strategically focus solely on small-balance – $1-5 mil – preferred equity for commercial real estate investments, with an emphasis on multifamily transactions in the $5-30 mil range with proven sponsors who can maximize the upside through value-add renovations.
“We are one of the only reliable providers of small-balance preferred equity, an investment that takes priority in the capital stack,” explains Bastan. “This fund is uniquely dedicated to this underrepresented segment of the capital stack and offers investors the opportunity to be insulated from loss while receiving current cash flow, due to each investment’s protections in the lowest equity loss position. With this model of short-term investment, in which sponsors typically only need funds for 1-3 years, investors in the fund will be able to capitalize on current trends rather than depend on future market growth.”
Bastan and Moghavem founded Base Equities after more than 25 years of combined experience in acquisitions, property management, repositioning, asset management, underwriting, and loan originations in the commercial real estate industry on a national scale.
The fund’s projected return to investors is a 14% net return, generated from in-place cash flows, up-front payment reserves, and value appreciation realized after the implementation of an approved value-add program.
Base Equities is currently invested in three assets undergoing hotel-to-multifamily conversion, which are on track to exceed the targeted return. Additionally, Bastan previously founded Brookside Equities, a private equity investment company focused on acquiring, managing, and repositioning value-add real estate throughout the U.S. The principals now own and operate a portfolio of over 800 apartment units in multiple states.
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