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Taconic, Nuveen target $1B in assets with latest fund

Taconic Partners and Nuveen Real Estate have completed a $260 million fundraise for their jointly-sponsored value-add fund, New York City Property Fund II.

The equity commitments, including leverage and strategic co-investment, will allow the fund to target a portfolio in excess of $1 billion and capitalize on unique buying opportunities across all real estate sectors throughout the New York Metropolitan Area as the pandemic recovery unfolds.

“We are looking forward to deploying this capital in tandem with the resurgence and ongoing recovery of New York City,” said Chris Balestra, President and Chief Investment Officer for Taconic Partners.

CHRIS BALESTRA

“This city remains in a state of continuous invention and reinvention, which is one of its many strengths as we look towards the future, post pandemic. We are targeting large assets in sectors that will benefit during this next phase of recovery and reinvention.”

“We believe the COVID-19 pandemic will provide compelling investment opportunities for New York Property Fund II,” said Nadir Settles, Portfolio Manager and Head of New York Investments for Nuveen Real Estate. “With the fund acquisition of 125 West End, a Life Science conversion, we are well underway in executing the strategy we discussed with investors while raising capital.”

Nuveen Real Estate and Taconic Partners have collaborated since 2015, collectively investing more than $1 billion across over 1 million square feet in New York.

As the city continues to evolve in the wake of the COVID-19 pandemic, fund sponsors anticipate that changing workforce demands and the continued expansion of growth industries such as life science and content production, coupled with New York City’s strong recovery fundamentals, will present generational opportunities to reposition underutilized assets or build best in class product for the future.

New York City Property Fund II closed on its first acquisition, the West End Campus, in October 2019, which included 125 West End Avenue, a 400,000-square-foot office building, as well as 320 West 66th Street, a 105,000-square-foot production studio inclusive of a parcel of vacant land. Following the successful $600 million recapitalization of 125 West End Avenue in March 2021 with LaSalle Investment Management, on behalf of its underlying limited partner, sponsors are moving forward with a comprehensive renovation of the building to make it suitable for life science use. Supported by $393 million of construction financing from funds managed by Apollo Global Management, Inc. and Oaktree Capital Finance, the project will include a new robust mechanical plant with purpose-built lab infrastructure, a new high-performance façade, a roof terrace, conference center, and dramatic new lobby. Construction is expected to be complete in 2023.

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