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Benchmark’s first fund allows for $300M in acquisitions
With multi-family market heating up, firm turns to alternative to syndication
Aaron Feldman and Jordan Vogel’s Benchmark Real Estate Group has raised a $95 million real estate fund. Management at the property company intends to deploy the capital buying mixed-use and multi-family properties in Manhattan, Vogel told The Real Deal.
The money was raised from a group of high net worth individuals and family offices, Vogel said. He added that the fund will allow the firm to be more competitive and to close deals more quickly.
“We used to syndicate all of our deals. This is the first time we’ve decided to go the fund route,” he said. “The main reason is that it allows us to be more competitive in the current real estate climate. We’re able to move faster and make quick decisions and close all cash if necessary.”
Benchmark intends to continue with a low leverage strategy, but at a 65 percent loan-to-value ratio can close on at least $300 million of real estate in the next 12 months. Vogel said the firm is targeting deals priced between $10 million and $150 million.
The company has been an active buyer of multi-family product in Manhattan since it launched in 2009. In December, it paid $57 million for a mixed-use apartment and retail building at 55 Third Avenue in the East Village. The property has 55 rental units and 10,500 square feet of retail space. Current commercial tenants at the building include American eatery the Smith and Asian deli M2M.
But lately, Benchmark has found it harder to secure deals given the wave of new players entering the multi-family market, many of which can close on deals quickly or in cash.
“When we started in 2009, it seemed like we were the only bidders for properties,” Vogel said. “Now, there’s way too much equity chasing too few deals. So, when we find a good one, the ability to move faster, whether it’s doing a larger contract deposit or actually closing faster, gives us a competitive advantage.”
The company is already in contract for two mixed-use properties downtown, both of which are in the $10 million range, Vogel said.