It took a year for Charles River Realty Investors to raise $170 million for its first real estate fund in 2006. Its latest offering raised $290 million in just under a month, a reflection of institutional investors’ growing demand for Greater Boston real estate.
“People have a really optimistic long-term view of how real estate is going to perform in Boston relative to other cities,” said Brian Kavoogian, president of the Newton-based investment management firm. “We see it the same way. Boston is a very different place than it was five years ago.”
The new fund, Charles River Realty Investors Fund III, has a potential buying capacity of approximately $1.5 billion using leverage and outside partners, Kavoogian said. The bulk will be invested in Greater Boston real estate.
Affiliated with Newton-based National Development, the firm’s two previous funds were invested in a range of properties including large suburban repositioning projects such as The District in Burlington and urban redevelopments such as the Circle Cinema property in Boston’s Cleveland Circle, where a hotel and age-restricted housing is being built.
The new offering received the bulk of its investments from foundations, educational endowments, pension funds and insurance companies, Kavoogian said. It will pursue a similar investment strategy, including suburban repositioning projects, senior housing, health care facilities and potentially ground-up development.
Kavoogian also sees opportunities to acquire industrial properties in Boston and inner suburbs, as service businesses get squeezed out by the housing boom.
“The industrial properties are disappearing and being turned into multifamily housing, so the supply is shrinking,” he said. “Yet the demand is rising as companies are forced out of the existing facilities. There’s a whole group of users that need to be proximate to the city, whether they’re plumbers or caterers. They can’t all be out on I-495.”