Scottsdale-based CaliberCos. eyes distressed properties with new real estate investment fund – The Business Journals

Fresh off taking the company public, Scottsdale-based CaliberCos. is looking to raise $250 million for a new investment fund.
Caliber (Nasdaq: CWD) has opened the Core+ Growth & Income Fund, which will invest in real estate in Arizona, Colorado and Texas. The “core” and “growth” parts of the fund’s name reflect the types of assets it will pursue, which range from stable, income-generating properties, such as apartment complexes, industrial buildings, medical offices and retail buildings to others where Caliber can capitalize on assets that are underperforming, under-managed and/or underpriced.
Multifamily and industrial, in particular, will be key targets for the fund, said Caliber’s CEO Chris Loeffler.
“We went from a market that was in a very hot development cycle where it made sense to build as much as you could and as fast as you could. Now, we’re in a market where there’s a lot of volatility and a lot of fear with investors,” Loeffler said. “For the first time that I’ve seen since 2012, following the 2008 financial crisis, I’m starting to see high-quality income increasing properties that we could buy at a discount.”
The investment pool for the fund will be made up of capital allocated from financial advisers, high net-worth individuals and boutique institutions such as smaller pension plans and banks, Loeffler said. The minimum investment into the fund is $50,000.
Should the full $250 million be raised, Caliber will look to leverage that into as much as $650 million in new assets.
“We see an opportunity to leverage Caliber’s historical knowledge investing in auction properties, non-performing loans, bank-owned properties, and other distressed strategies to find the right entry point for purchases. Many assets today are performing well financially, but the debt, or the current sponsor, is in some form of distress,” said Caliber President Jennifer Schrader, in a statement. “Now is the time to re-enter the market with fresh capital and start solving problems.”   
Last November, Caliber closed on a $45 million land lease to develop The Riverwalk Development alongside Loop 101 from Talking Stick Way on the south to Via de Ventura on the north. Caliber said it will build on roughly 78 of the 100 acres, planning mixed-use entertainment, retail, restaurants, hotels, event venues and immersive art attractions for Riverwalk. The deal also includes the underlying leases for the existing Hampton Inn and Topgolf entertainment venue.
As of Friday, Loeffler said the firm is in the quiet period in planning Riverwalk but the development is still moving forward.
Barring any additional delays, Caliber expects to break ground on the project by the end of 2023, according to previous reporting. When work on the project begins, it will join an emerging entertainment district in Scottsdale on Salt River Pima-Maricopa Indian Community.
The developers behind Arizona Boardwalk at Talking Stick recently acquired 48 additional acres for future family-fun entertainment that would join OdySea Aquarium, Butterfly Wonderland, Pangea Land of the Dinosaurs and the newly opened Museum of Illusions. Also nearby, Palmer Development Group broke ground this spring on a $100 million project called The Sydney, which will bring food and beverage, nightlife and a Reverb by Hard Rock hotel near 90th Street and the Loop 101 freeway.
After finalizing its initial public offering, Caliber debuted on the Nasdaq stock market in May. Caliber closed trading Friday at $2.17 a share, down 12 cents, or 5.2%. Track the stock here.
The firm generated $83.9 million in revenue in 2022 and $56 million in 2021. It incurred expenses of $92.4 million in 2022 and $78.1 million in 2021, according to a regulatory filing with the Securities and Exchange Commission.
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