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Titan raises $80M for Real Estate Fund I

Titan Development, one of the companies behind the mixed-use project called The Highlands, has closed on the first round of funding on a $200 million real estate fund to fuel its pipeline of more than 20 projects, including a good number earmarked for New Mexico.

Thanks to the company’s track record of returns to investors in the past decade, $80 million was raised in just under six months for the Titan Development Real Estate Fund I, according to the company’s top executive. “Seventy-five percent of that amount came from investors we already had relationships with,” said Drew Dolan, Titan’s president. Most of those previous investments occurred on a deal-to-deal basis. “Now, they (our backers) get the diversity of investing in several asset types in many different markets,” Dolan said.

Employees of New Mexico Mutual and Integrion Group are planning a Dec. 11 move to their new home office, a three-story facility located next to Balloon Fiesta Park. (Courtesy of New Mexico Mutual)

While based in Albuquerque, Titan has a wide reach.

With $120 million more to go to hit the private equity fund target, Titan said it makes sense to market to private and institutional investors in the states where these future “high-quality” projects will come out of the ground: New Mexico, Texas, Florida, Arizona and South Carolina.

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Titan’s pipeline consists of projects in the multifamily, senior living, self-storage and industrial segments. Dolan said about 30 percent of the projects on the drawing boards will be “deployed” in New Mexico, primarily Albuquerque and Santa Fe.

Titan touts its expertise on the development and construction sides, but once the projects are finished, the company turns over day-to-day operations to professional management.

Securing financing to get the projects rolling is ambitious and the final tab is well beyond the $200 million private equity raise. “But the fund really helps put these projects into play much sooner,” said Dolan.

Kurt Browning, Titan’s chief development officer, said the money in the equity fund is typically 35 percent of the overall total development projection, since debt will cover the other 65 percent.

“So if we raise the $200 million in private equity, this will equate to approximately $570 million in overall total development” costs associated with the future projects, he said.

Some of that money will make its way to funding The Highlands, a development north of Central Avenue near Presbyterian Hospital, with an estimated price tag of $95 million. Browning said the once-blighted area will be transformed into a transit-oriented village, with apartments fetching some of the city’s highest rents, a Marriott Springhill Suites Hotel, multiple retail establishments and a food hall on par with those in larger cities.

“The whole idea is to create a (future) neighborhood on the order of Nob Hill and EDo,” east of Downtown, said Browning, adding that Maestas Development Group and Presbyterian are partners in the enterprise.

Browning estimated 1,150 construction jobs and 425 permanent jobs for the five-block development, not to mention a tax base to benefit the city coffers.

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Mutual benefit

More than a year after breaking ground, the employees of New Mexico Mutual and Integrion Group are planning a Dec. 11 move to their new home office, a three-story facility located next to Balloon Fiesta Park.

The $17.2 million facility is designed to meet the needs of the workers’ compensation insurer’s workforce and its wholly owned third-party claims administration subsidiary for years to come.

Both companies have been operating out of leased offices near the Century Rio 24 movie complex. The new 58,000-square-foot facility will consolidate the physical location of New Mexico Mutual’s operations and Integrion Group.

“This is a historic moment for our company,” said Norm Becker, the company CEO. “Our new building is an important investment in our employees and the community. We look forward to continue serving all our customers out of our new headquarters.”

New Mexico Mutual’s partners for the project include Architectural Research Consultants, RMKM Architecture, Bradbury Stamm Construction and professional adviser John Pate, an architect with Molzen Corbin.

Working with 400 independent agents throughout New Mexico, the company writes more than 30 percent of the voluntary workers’ compensation insurance market in the state. Premium payers are 7,000 businesses, covering approximately 150,000 workers.

The new facility will not only emphasize contemporary trends, but also will elevate the work environment for the company’s 150-person workforce, which is expected to grow in time.

Steve Sinovic is the Journal’s real estate reporter. He can be reached at ssinovic@abqjournal.com.

 


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