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Sunday, 15 September 2013 22:00

Lansing firm plans $120M fund to spur commercial development

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A familiar name in Michigan’s real estate development community is raising capital for a new fund aimed at adding some fuel to the deal-making environment in the state this fall.

Lansing-based Great Lakes Capital Fund, via its Develop Michigan Inc. economic development arm, is working to close a $120 million offering for its Develop Michigan Real Estate Fund LP, according to documents it filed with the U.S. Securities and Exchange Commission.

Company officials say they plan to use the fund to provide capital for commercial real estate developments across the state.

Peter Giles, community development finance analyst for Great Lakes Capital, said the firm is working on a program that would offer loans to commercial developers across the state. While the firm isn’t close to making a formal announcement about the venture,

Executive Vice President Rick Laber said the company is working with the state and a marketing firm to outline a timeline and a strategy to unveil the fund.

An official announcement with further details about the fund and the loan-making process could come later this month at the earliest, Laber said.

A spokesperson from the Michigan Economic Development Corp. would neither confirm nor deny the agency’s involvement in supporting GLCF with the fund.

Patrick Lennon, chair of the West Michigan program committee for the Urban Land Institute of Michigan, said the fund could add to the capital spectrum for developers looking to line up funding for projects.

“It looks like it’s going to be just another option out there for developers to find financing,” said Lennon, partner at the Kalamazoo office of Honigman Miller Schwartz and Cohn LLP.

Develop Michigan’s investment focus is Detroit, Grand Rapids and Mid-Michigan as well as some rural locations. The firm invests in a range of property types including mixed-use projects, core urban redevelopments and modern industrial facilities, among others.

A U.S. Treasury-designated community development finance institution since 2007, GLCF has received $10 million in federal grants that go toward community development projects. The 21-year-old firm’s investments of equity capital, short- and long-term debt, and various state and federal tax credits have totaled more than $2.5 billion.

As MiBiz previously reported, the GLCF is one of the largest fund managers in the state for low-income housing tax credit (LIHTC) projects, which make up roughly 70 percent of the firm’s business. According to the company, it was founded as a nonprofit to provide other nonprofits and developers of projects in distressed areas or of residential projects smaller than 100 units with access to the LIHTC.

The firm has more than 500 LIHTC-based subsidized housing projects in its portfolio.

Read 4952 times Last modified on Monday, 16 September 2013 06:19

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