What's Brewing in the Real Estate Market: Wealthy Investors

(The Wall Street Journal)

by Sheila Muto

November 17, 2004 - Two trusts of the Gordon P. Getty family have invested in The Prescott Group, LLC, a New York real estate investment banking firm that is setting up a handful of real estate partnerships in which high net worth individuals can invest.

The partnerships, which the Getty family trusts will also invest in on a case-by-case basis, will be looking to acquire more than $400 million of properties next year.

Prescott is putting together four such partnerships so far: one will own a $200 million portfolio of office and industrial properties located in the Southeast; another will own a $100 million portfolio of retail properties throughout the U.S.; another will own a $75 million apartment portfolio; and one will have a $100 million hotel portfolio.

Prescott will invest alongside the wealthy investors - defined by the firm as those with at least $20 million in assets to invest - in each of the partnerships. Investments of $250,000 to $500,000 are expected from each investor, says Ted Gamble, the firm's managing director. Prescott also will offer real estate portfolios tailored for individual investors or families looking to invest $50 million or more.

Neither Mr. Gamble nor Bill Prezant, a Reno, Nevada lawyer, who is an advisor to the Getty family trusts, would disclose how much the two trusts - called Orpheus and Pleiades - are investing in Prescott or in the individual partnerships.

The partnerships "give high net worth individuals opportunities to invest in different areas and property types of institutional investment quality" says Mr. Prezant, rather that "the single apartment building or office building" that this group of investors is typically presented with.