DivcoWest Closes Fund at $2.25B

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DivcoWest has closed its latest value-add real estate investment fund, DivcoWest Fund VI at roughly $2.25 billion in capital commitments, surpassing the fund target of $1.5 billion. The fund’s investors include domestic public and corporate pension funds, insurance companies, as well as sovereign wealth funds.

Taking advantage of the robust demand for innovation and life sciences space brought about by the urgent need for developing and testing a COVID-19 vaccine, the firm is set to target these sectors, investing in gateway markets and acquiring existing value-add life science, R&D and office assets. The two sectors are more recession-resilient compared to DivcoWest’s current portfolio, which primarily consists of office assets in major markets, including Austin, Texas, as well as Silicon Valley and Boston.

Earlier this year, DivcoWest wrapped up work on the 460,000-square-foot Cambridge Crossing – JK Site in metro Boston. The firm is further expanding its campus with the addition of a two-building project totaling more than 450,000 square feet and dubbed Cambridge Crossing – Parcel G. The two developments are part of a 45-acre redevelopment of a former rail yard at the intersection of Cambridge, Somerville and Boston. At full build-out, the campus is expected to include a new retail neighborhood, an 11-acre public park and more than 2,000 residential units.

Uptick interest

DivcoWest’s announcement comes less than a month after Blackstone closed its record-breaking investment vehicle, Blackstone Real Estate Debt Strategies IV, with $8 billion in commitments. And prior to that, the firm also closed on its sixth European opportunistic real estate fund, Blackstone Real Estate Partners Europe VI, with a total capital commitment of $10.7 billion.

In June, Rockpoint Group completed equity raises for two investment vehicles, securing an aggregate $5.8 billion. Launched two years ago, Rockpoint Real Estate Fund VI is an opportunistic vehicle targeting the purchase of high-quality, well-situated office, multifamily and hospitality assets below replacement cost. Meanwhile, Rockpoint Growth and Income Real Estate Fund III was also introduced in 2018, with a target of $2 billion.