Hanover Co. sets up fund to buy vacant buildings

Houston-based real estate development and property management firm Hanover Co. says it has closed its Hanover Opportunities Fund (HOF) at $125 million in capital commitments and already has started acquiring land and underutilized commercial properties—such as vacant and distressed office buildings and—for redevelopment into multifamily or industrial projects.

Rather than acquiring stabilized assets, the HOF targets what Hanover calls early-stage opportunities that can be executed through Hanover’s vertically integrated development platform.

“Today’s real estate environment is seeing a massive demographic shift and accelerated obsolescence in office, all against a backdrop of capital scarcity,” says Brandt Bowden, CEO of Hanover.

“HOF is built to take on the risk to reposition assets, while providing immediate liquidity to sellers—often before entitlements are in place,” adds Bowden.

The redevelopment of such properties could entail an initial demolition project to dismantle or a structure considered obsolete.

The HOF can close acquisitions quickly, says Hanover, with or without municipal zoning approvals in place, and offers flexible deal structures to accommodate sellers.

“For site owners, lenders and intermediaries, HOF can offer quick-close, all-cash solutions with a trusted development sponsor,” says Bowden.

The fund will be led by Bowden and Hanover Managing Director Drew Willson, and was created to address what Hanover calls “capital dislocation and the growing need for pre-development risk capital.”

According to Hanover, the HOF already has made three acquisitions: an industrial development site in York, Pennsylvania, and two multifamily development sites in San Jose, California.

Hanover says the HOF is “actively pursuing acquisitions across Hanover’s national footprint, which includes [the] Sun Belt, West Coast, Northeast and Mid-Atlantic markets.”