Menlo Equities LLC is aiming to raise $1.20 billion for Menlo Institutional Perpetual Partners, its first perpetual life real estate fund, IPE Real Assets reported, citing industry sources.
The fund will target offices, biotech buildings, data centers and light industrial assets in Silicon Valley; Seattle; Phoenix; Denver; North Carolina; the 128 Corridor outside Boston; and Austin, Texas.
The fund will be seeded with six California properties, including three in Orange County, two in Silicon Valley and one in San Diego, the report added.
Menlo has set its fundraising target at around $300 million to $400 million for the first 12 months, which it hopes will come from three to four large institutional investors. The fund intends to raise an additional $800 million in the following 12 months from smaller institutional investors.
According to the report, the fund will target net returns of 9% to 10% and plans to use 40% leverage, with Menlo making a co-investment of $30 million.