Artemis Closes First Fund, Set to Hunt for Property

Artemis Real Estate Partners, has closed its first institutional fund, Artemis Real Estate Partners Fund I.

Washington, D.C.—Artemis Real Estate Partners LLC, has closed its first institutional fund, Artemis Real Estate Partners Fund I LP.  Equity commitments for the fund total $436 million, representing an investor base that includes public and private pension funds, foundations, family offices and wealthy individuals. The cofounders of the fund are chairman Penny Pritzker and CEO Deborah Harmon.

Separately, Artemis established a $300 million separate account with the New York State Common Retirement Fund in the fall of 2011, which combined with the fund commitments provides $736 million of investor equity under management. With leverage, Artemis says it will have as much as $1.8 billion of combined purchasing power, which it will use to invest in properties across the risk spectrum, and across the property types, including multifamily and senior housing sectors.

Though it will invest broadly in the long run, Artemis Fund’s initial focus, according to Artemis Real Estate Partners, will be on distressed situations and nonperforming loans in the $10 million to $40 million equity range, though those deals might be larger with co-invested capital. Artemis Fund I will invest, via joint ventures with local partners, “in the major knowledge-based markets as well as secondary markets with attractive growth characteristics.”

The separate account will make investments in core office, retail, industrial and multifamily properties in primary markets, using modest leverage. It too will invest through joint venture partnerships; industry veteran Jim Smith joined Artemis in November 2011to manage the NYCRF relationship.

Artemis Real Estate Partners did not specify how much of its investment activity will be in multifamily rental properties, though it is a popular sector with investors these days, for clear demographic reasons. According to the U.S. Census Bureau, about 35 percent of all U.S. households rent their residence, up from 31 percent during the mid-2000s, and the bureau estimates that the total number of renting households will increase as much as 470,000 each year throughout the 2010s.