10/24/2013
ADVALUREM SEEKS SECONDARY MARKET OPPORTUNITIES
Advalurem Group, a New York-based investment management company, is looking for middle market [investing] opportunities in secondary markets around the U.S. due to competition and cap rate compression in primary markets. “Pricing has been better in secondary markets such as Charlotte, Dallas and Houston,” said Gabriel Pozo, founding principal. “We can come in as co-investors, joint venture partners or equity sponsors. In those secondary markets our partners don’t have the time or assets to provide the capital we have.”
To this end, the company has expanded its [investing] platform with the hire of Fred Scott from Indianapolis-based Strategic Capital Partners. Scott filled a similar role for the company, which also focuses on value-added middle-market opportunities. He targeted equity transactions averaging $5 million there.
Scott told REFI he is a strong believer in the need for capital for middle-market real estate deals and saw that Pozo has the same mindset. “We saw the real estate world in the same light,” he said. “We have one focus only and that’s providing equity capital for middle market transactions that require around $3-$15 million in equity because [this market] goes unnoticed.”
Advalurem invests in all asset classes except hotel and Scott will oversee acquisitions, transaction execution and capital raising. Using a value-add strategy to help [property owners] reposition assets, Pozo said he and Scott will focus on recapitalizations. The company has a number of these deals already in the pipeline.