DENVER — Today, Northstar Commercial Partners announced the launch of their $125 million Northstar Integrity Growth Fund (the “Fund”), in partnership with Integrity Trust of Colorado Springs. The Fund is a REIT under a 506(c) designation, which is an evergreen fund focusing on 75 percent value-add, and 25 percent cash-flowing commercial real estate investments in primarily Western growth markets, including but not limited to Colorado, Utah, Texas, Arizona, New Mexico, and California.
“We are honored to launch a real estate fund with a respected and well-established wealth management firm like Integrity Trust,” Northstar’s Founder and CEO Brian Watson said. “Launching a structured fund was the natural evolution for Northstar and Integrity, together we have successfully executed on 38 transactions, with a value in excess of $130 million over the last several years, generating a median annualized return in excess of 21 percent. In combining our resources and industry knowledge, I’m excited about the prospect of how the Northstar Integrity Growth Fund can create more opportunities.”
The launch of the Fund will target commercial real estate assets with at least a 30 percent discount to replacement cost and hopes to reasonably project an investor level IRR of 14%-18%. Due to growing market uncertainties in the coming months, Northstar and Integrity Trust hope the Fund will help mitigate risks by providing investors with access to a diversified real estate asset portfolio which will have a low correlation to the public markets.
“We like the idea of launching the Fund at this time, because the strategy of buying hard assets at a deep discount to replacement cost has proven itself through several distinct market environments,” said Integrity Trust President, Eric Davis. “We believe real estate investing can be a safe haven during slower economies. Having ready access to capital during slow economies with a Fund structure will allow us to take advantage of inefficiencies in the market; we are excited about the prospect of buying undervalued assets and turning them profitable.”
Finally, both Northstar and Integrity will be able to share their strong sourcing pipeline of potential investors. Each company will bring together an extensive network of national relationships that will help reach the $125 million goal.
“This will be another formal partnership with Integrity, and I believe it will be a long, successful partnership. I’m excited to share The Northstar Integrity Growth Fund with our investors. Our prior fund structures have been beneficial for our investors, and I am convinced this will be no different,” finished Watson.
