Madison seeks to offer those planning their end of fund life situations a strategic liquidity alternative. There are a variety of circumstances near the planned end of a fund’s term which can call for the partial exit of investors and occasion the transfer of what might seem to be illiquid partial commercial real estate assets.
Madison, as a financial investor, may partner with those seeking to remain invested. Madison’s participation can offer wind-up options to those electing to exit. When an unplanned situation seems to indicate a fund restructuring is the best option, Madison’s participation can add optionality.
Madison believes its equity capital can offer clarity to complex end of fund life scenarios and reduce the potential for conflict between sponsors and their investors in end of fund life situations.
Representative Transactions
Lazora
Lazora, a leading Spanish residential fund, had reached its end of life in 2018, and its sponsor, Azora, was looking for strategic partners to recapitalize the majority of the limited partnership through a pooled secondary trade. In our view, the transaction provided an attractive opportunity to participate in the emerging Spanish multifamily rental market, which Madison believes is poised for significant growth in the coming years. At acquisition, the portfolio consisted of 65 assets and 6,458 units located throughout Spain, with the majority located in Madrid.
Black Creek
In December 2017, Madison acquired an initial 94.8% interest in a real estate investment vehicle managed by Black Creek Group. The vehicle was seeded with the acquisition of nine industrial properties of recently completed Class A warehouse and distribution facilities totaling approximately 2.0 million square feet, located in four top tier coastal and infill industrial submarkets across the United States, including Southern California, South Florida, Eastern Pennsylvania, and Atlanta.