Arden Ready To Launch Big Fund
Arden Group loves makeovers, especially those of floundering hotels and office buildings. (A little nip and tuck, and any old hotel can feel young again.) Since its 1989 inception, it had completed over $2B of direct investments before moving to a discretionary fund platform in 2012. Now it's launching its second fund in less than two years.
Founder Craig Spencer says the company started planning its second fund once 75% of the $70M capital raised in the first fund was invested. (We do the same thing when planning which dessert to order... 75% of the way through dinner.) The second fund launches later this month, with intial closing planned for Q1 '14. The target capital raise: $250M, providing the company with $750M in buying power. Craig plans on sticking to his investment strategy of purchasing and repositioning financially distressed hotels and office buildings in the 20 largest cities that clearly demonstrate positive demand factors like high white-collar job growth.
Fund one, launched in April 2012, snared four hotels and two office buildings at a cost of $250M. The investments in fund one range from the $13M Tower 1320 office building in Las Colinas, Dallas to a $55M investment in the Westin Perimeter North Hotel in Atlanta (above, the fund's largest to date). Arden Group also sold its first acquisition from August 2012, which resulted in a significant ROI for the fund.
The company's own Philadelphia office is a target for renovation. Arden Group purchased 1635 Market St in '95 and moved its HQ there in the early 2000s. Over the next 12 months, he aims to transform 7 Penn Center back into a premier Class-A boutique office building in the West Market Street submarket with an edgy, clean look. That, paired with its location and accessibility to the Comcast Center, should appeal to tenants likeÃ attorneys, entertainment, and tech-oriented companies.