Following the success of KI Florida Fund I, we are pleased to announce the launch of KI Florida Fund II.
After more than a year of planning, KI Florida Fund I launched in January of 2017. Since then, Fund I has made ten diversified commercial real estate investments and exited three, posting strong early returns.
Thanks to Fund I’s success and the continued support of our investors, Kennedy Investments announced the opening of its second commercial real estate investment fund, KI Florida Fund II, on July 15th, 2019.
Kennedy Investments and the Fund Model
Commercial real estate investing changed dramatically in the years following The Great Recession. By the mid 2000’s, the use of the internet and the emergence of new technologies had already begun to compress deal timelines and erode local investors’ historical barriers to entry such as geographic location, local expertise, and transaction size. A sudden surplus of non-performing loans and distressed assets only served to accelerate this dramatic transformation of the marketplace.
Gone were the days of identifying a desirable acquisition, putting it under contract, and spending 60 to 90 days performing due diligence, fundraising and securing a loan. By 2012, Blackstone, the world’s largest real estate private equity firm, had founded Invitation Homes to buy thousands of single-family homes across the United States, many of them sight unseen via online foreclosure sites.
Just as with the residential market, desirable value-added commercial real estate investments were also frequently transacted within days or weeks, usually with cash, enabling larger firms with strong liquidity to pursue an out-sized share of the attractive commercial real estate assets in Tampa Bay. In order to continue to pursue our firm’s investment strategy of value-added and opportunistic acquisitions, Kennedy Investments recognized the importance being able to deploy capital quickly.
After decades of successfully syndicating individual commercial real estate investments in Florida, we adapted the company’s investment strategy to the fund model, launching KI Florida Fund I on January 1st, 2017.
KI Florida Fund I Timeline:
- Fund I launched in 2016, closing on December 31st with $10.6M in initial equity commitments.
- The Fund deployed approximately 49% of its committed capital into 3 diversified property investments & a commercial mortgage in 2017.
- In 2018, the Fund made four additional investments and exited one which returned more than 150% of the Fund’s investment after just four and half months.
- That sale, along with a 3rd-party valuation of Fund I’s remaining holdings, produced an estimated investor IRR of +22% (on unrealized and realized gains) by the end of 2018.
- In March of 2019, the Fund made its second disposition, achieving an ROI of 45% and IRR in excess of 100%.
- By the middle of 2019, Fund I had made distributions to investors totaling 12.5% of their original investment.
- A third investment (a short-term commercial mortgage) was completed in Q3 of 2019, achieving an ROI over 23% for the Fund.
- In January of 2017, Kennedy Investments sold Hanna Warehouse II, which was owned by KI Florida Fund I with a deal IRR of 70%.
KI Florida Fund I’s Investment Portfolio
Kennedy Investments is an asset agnostic, value-added real estate investor and operator, and our investment funds follow the same philosophy which has served the firm for nearly fifty years: that all commercial property types can provide superior returns through sound acquisition strategies and exceptional property management.
Like our first fund, KI Florida Fund II will offer accredited investors access to diversified commercial real estate investments in Florida, targeting assets with the potential for income generation, capital appreciation, or value enhancement through renovation or repositioning.
Current clients and accredited investors interested in participating in KI Florida Fund II are encouraged to contact us here for more information.
