Redcar Fund Management has closed on Redcar Fund II (“Fund II”) with $418 mil in equity commitments. Through its successful debut Fund I, which closed in January 2020, Redcar acquired 15 assets which will total 1.4 msf upon completion of their redevelopment. All of the properties in Fund I are located in the high growth LA submarkets of Culver City, Santa Monica, Silver Lake, Frogtown and Chinatown, which are being driven by the expansion of content creation studios, gaming, music, fashion, and media companies such as Amazon Studios, HBO, and Apple.
Redcar's properties within these niche markets consistently experience strong leasing demand, as tenants increasingly seek top-quality low-rise creative spaces. This preference stands in contrast to the challenges faced by conventional high-rise office buildings, which have struggled to attract tenants since the onset of the pandemic. As a result, Redcar sees continued strong occupancy and leasing demand across its portfolio.
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While Redcar Fund I focused exclusively on Los Angeles, Fund II includes a co-investment sidecar that will help capitalize the firm’s expansion into Austin, TX, which exhibits similar favorable tenant demand for its specialized industrial redevelopment strategy. Fund II currently owns a portfolio of 12 assets across Los Angeles and in Austin’s St. Elmo and South Austin neighborhoods.
As with Fund I, investors in Fund II and the co-investment sidecar include endowments, asset managers, private pensions, public pensions, family offices, insurance companies, financial institutions, foundations, wealth managers, and high net worth individuals in North America, the Middle East and Europe. Fund II exceeded the size of Redcar’s $412 mil Fund I amidst a challenging fundraising environment, especially for U.S. office managers, according to Co-Managing Partner Christopher Chee.
Since its founding in 2011, Redcar’s team has grown in lockstep with its portfolio and includes 45 talented people across design, construction, investments, leasing/marketing, property management, and accounting. The firm also works with a number of highly regarded architects, including Olson Kundig, Selldorf Architects, LEVER, Allied Works, HGA, and Breland-Harper.
Evercore Group LLC acted as global capital advisor and Kirkland & Ellis LLP acted as legal advisor for Redcar Fund II and the co-investment vehicle.
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