Belay and Arc Capital Gear Up for $425M Acquisition Spree in US Southwest

reprints


Belay Investment Group has provided Arc Capital Partners a $100 million investor allocation to back the firms’ joint plans to buy up to $425 million of urban real estate in America’s sunbelt, ArcWest—a partnership of the two firms—announced this week.

SEE ALSO: Fall Financing Forum: Attendees Talk 2018 and Why LA Isn’t Just for LeBron

The arrangement allocates funds to ArcWest from California’s gigantic State Teachers’ Retirement System for future investment in unspecified properties in southwestern states like California, Nevada, Texas and New Mexico. The sunbelt’s 10 largest cities, which include Dallas, Houston, Los Angeles and Phoenix, combine to form an economy that produces more than $3 trillion annually.

“Belay’s partnership with Arc Capital Partners…proves out that a thesis-driven investment strategy guided by property-level execution can create value,” Barry Chase, a managing principal at Belay, said in a statement. “Belay is excited to increase its capital commitment to Arc Capital Partners, consistent with our collaborative business strategy, to gain access to middle-market properties in strong urban markets.”

Since its founding in 2013, Arc Capital Partners has invested in—or collaborated on—about $400 million of investment in urban real estate, the company said. Its ArcWest partnership with Belay, initiated two years ago, has invested thus far in a 45,000-square-foot retail center in Los Angeles’ Koreatown called Chapman Market, as well as a 30,000-square-foot creative office and retail asset, known as the Jones Building, in the city’s Silver Lake neighborhood

“We are honored to have been partners with Belay since 2016,” said Quincy Allen, a managing partner at Arc Capital Partners. “We continue to see compelling opportunities in urban infill locations that have been previously overlooked and we are better positioned to pursue these opportunities with this new sllocation.”

CalSTRS, as the teachers pension plan is known, invests funds on behalf of nearly 1 million public employees in the state. With $219.2 billion under management, it ranks as the largest retirement fund for teachers in the U.S., and the world’s eleventh-biggest public pension fund overall.

The fund has at times worn the hat of a socially conscious activist investor, divesting from gun manufacturers in the wake of the Sandy Hook Elementary School shooting five years ago. In January, the fund wrote an open letter to Apple, in which it invests, encouraging the computer company to consider the effects its ubiquitous devices have on children’s development.

A representative for the pension fund did not immediately respond to a request for comment.