Valtus, Bruin Capital launch joint venture for Western US growth

Capro Capital JV is targeting $500m for its first fund, launching with $100m of equity.

Valtus Capital Group and Bruin Capital Partners are rolling out a joint venture dubbed Capro Capital to build a wider commercial real estate investment and financing presence in the Western US.

The Las Vegas-based venture debuted March 29 with $100 million of equity capital and a target of $500 million of assets under management for its first fund. The joint venture will be focused on partnering with top real estate operators and developers nationwide as part of its investment strategy.

Viney Singal, founder and chief executive officer of Capro and Las Vegas-based private investment bank Valtus, told Real Estate Capital USA the joint venture is looking for mid-market investment opportunities ranging from $10 million to $20 million. While the focus will be on equity, the JV will also consider a variety of debt-related strategies.

Capro’s main focus is on operator and developer partnerships as well as direct acquisitions and financing opportunities. Geographic targets include Arizona, California, Colorado, Nevada, Oregon, Texas, Utah and Washington.

Capro is backed by Bruin, the management arm for Larry Canarelli’s family office and personal investments. The joint venture fund is operating with all internal capital at present and Singal noted that in the next nine to 12 months the firm will think about opening the vehicle back up or opening a second vehicle.

As part of Capro’s deployment strategy, it is looking to acquire assets directly and make joint venture equity investments, preferred equity investments and loans across all major asset classes. It will concentrate on niches which include senior housing, homebuilding, land and gaming.

For its commercial real estate lending, Capro is keeping all avenues open. Singal said the firm will be flexible where it can, noting mezzanine debt and even stretch senior secured debt are possibilities where Capro can give sponsors more leverage and higher proceeds as well as a lower blended interest rate.

“It’s an interesting time right now for development because of the cost of construction debt,” Singal said. “We’ll be more selective on doing equity investments for development where we feel like we’ve got to be able to secure the right debt proceeds, but we’ll be available for parties if they need refinancing dollars or the like; we can do that through this venture.”

Capro’s backers can make larger investments as well and have done so previously. Outside the Capro fund, Valtus and Bruin invested in the UnCommons, a $400 million mixed-use development in Las Vegas featuring office, retail and residential space.

Singal said being a capital provider for developers under construction now is top of mind for Capro. He said the firm wants to step up to ensure developers finish projects, especially when obstacles such as interest rate increases, burn-out interest reserves or delays and cost increases arise.

On a selective basis, Singal said new development will make sense for Capro in stronger asset classes such as industrial, multifamily and different for-rent products. “You haven’t seen valuation meet up yet, where sellers are ready to sell at a price that reflects today’s interest rates,” Singal said. “That will eventually occur and then we will be active on acquisitions.”