Hanover Closes $125M Site Acquisition Fund
The investment vehicle will target raw land and commercial properties for redevelopment.
Hanover Co. has closed its Opportunities Fund at $125 million in commitments. The investment vehicle focuses on the acquisition of land and underutilized commercial assets for development or redevelopment into multifamily and industrial projects.
The firm has already identified about eight such prospects in California, Dallas, Atlanta, Boston and Florida, CEO Brandt Bowden told Multi-Housing News. These include vacant land sites and distressed office properties, which the company would likely raze, he added.
Against the backdrop of capital scarcity, the current real estate environment witnesses an accelerated obsolescence in the office sector, which the fund aims to capitalize on through repositioning efforts, Bowden said in prepared remarks.
The company has already deployed proceeds from the investment vehicle to purchase two multifamily development sites in San Jose, Calif., and an industrial one in York, Pa.
Hanover’s Silicon Valley investment
Earlier this year, Hanover paid $78.6 million for 22.2 acres of farmland at 2620 Seely Ave. in San Jose, but then sold 7 of those acres for $73.6 million, The Mercury News reported. Bowden confirmed for MHN that the acquisition was made through the Hanover Opportunities Fund.
A new mixed-use neighborhood featuring 1,472 units could rise on the site, according to the same publication. These would include 154 for-sale townhomes to be developed by SummerHill Homes—the company that purchased Hanover’s 7 acres—and 178 affordable apartments to be constructed by The Pacific Cos. Hanover plans to build the remaining 1,140 units.
The company intends to get started on some of the apartments through a 397-unit project for which it secured a $120.4 million construction note from JPMorgan Chase, the same source shows.
Hanover is no stranger to Silicon Valley development. In 2021, the firm brought online the 249-unit Hanover Diridon and sold it to Hines last year for $117.5 million, according to Yardi Matrix data. The property was renamed as Diridon West.
