The Campus @ Longmont, near Denver, CO, and consisting of 866,615 square feet of office, warehouse and lab space spanning 27 buildings, was Balfour Pacific's first investment under BPRE IV.
Emerging as a top performer in global league tables might be considered a long shot for a Vancouver-based private equity firm investing in U.S. commercial real estate. After all, there are at least 5,000 funds, many based in the U.S., focused on North America. Balfour Pacific managed to do just that. Preqin, the leading source of alternative asset industry data, ranks the firm’s inaugural fund as the #2 performer in North America and #4 globally among 2017 funds in terms of investment returns. The fund also stands out as having returned close to half of its invested capital. This underpins returns at a time when valuations are under pressure amidst the current economic crisis.
Balfour Pacific’s success is no accident. The firm was founded by value investor, self-made businessman and philanthropist, Sam Belzberg. Belzberg’s legacy continues with Belzberg & Co.’s sponsorship of the Balfour funds and a high-powered advisory committee that includes Belzberg’s son-in-law, Strauss Zelnick, who now oversees Belzberg & Co. Zelnick, based in New York City, is the former Chairman of CBS Corporation and Chairman and CEO of S&P 500 standout, Take- Two Interactive. Balfour’s advisory committee also includes Martin Glynn, former President & CEO of HSBC Bank Canada and HSBC Bank USA, David Podmore, Chairman and Co-founder of Concert Properties, Derek Lee, President of Prospero International Realty and Paul Haggis, a Bank of Canada director.
Balfour’s Managing Partner, Mark Scott, joined Belzberg in 2016. He subsequently built a team of high-performing transactors and asset managers to pursue Belzberg’s simple approach: target value-add U.S. commercial office, industrial and flex properties in secondary and suburban markets, and generate value by upgrading assets and increasing occupancy. Scott refined the strategy by focusing on states ranking high in economic freedom, a leading indicator of growth.
The firm’s strategy and investment track record are a driving force behind Balfour’s recent successful fund raise. The new fund garnered C$214 million, with significant investments from Belzberg & Co., prominent Canadian pension funds and ultra-high-net worth investors in the U.S. and Canada. More than double the size of its predecessor, Balfour’s newest fund is well positioned to continue the Belzberg legacy. The fund has so far invested 15% of investor capital in 563,000 square feet of well-leased office properties in Chicago and Dallas.
Mr. Scott sees opportunity. “We were fortunate to close the fund in February this year, above the high end of our target range,” he says. “This timing will allow us to make some attractive investments in the years ahead.”
Visit https://www.balfourpacific.com/ for more information.