Dollars are falling like leaves from autumn branches, as two real estate firms close some serious money-raising ventures.

This week, CB Richard Ellis Strategic Partners, LP, had its second and final closing after getting commitments for more than $300 million. The fund, which invests in repositioning, re-leasing and development opportunitites, is managed by CB Richard Ellis Investors, LLC, part of the CB Richard Ellis (NYSE: CBG) powerhouse.

“Market response has been very favorable,” said Vance Maddocks, president of the fund’s general partner. “Equity commitments totaled $324 million from 16 U.S. and international investors, including 10 investor clients that are new to CB Richard Ellis Investors.”

According to Maddocks, the investment team has closed and committed to investments totaling nearly $500 million, or approximately 70 percent of the fund’s total capitalization of $720 million. The fund has investments in a diverse set of property types and markets, including cities such as Los Angeles, San Francisco and Chicago.

Meanwhile in Austin, Expeditrix Corporation has closed a $7 million round of equity financing. The Web venture, which provides online collaboration services to the residential real estate industry, scored $5 million of the $7 million total from TL Ventures and Milestone International Investments, Ltd.

“As the real estate industry continues to move online, Expeditrix has proven that it is poised to capture a large portion of the transaction management market share,” said Bob Fabbio, managing director, of TL Ventures’ Austin office. “SmartClose’s superior design combined with Expeditrix’s industry knowledgeable team are key indicators of future success.”

Expeditrix will use the funding to accelerate its growth through recruiting and ramping out the national rollout of its premier product, SmartClose. SmartClose is a secure Web-based service that leverages the Internet to facilitate the entire residential real estate closing process. By linking all closing participants together in a collaborative online workspace, SmartClose streamlines communication and document management and increases the rate of successful real estate closings.

“We are thrilled to have secured backing from such prestigious VCs and to have these recognized leaders joining our board,” said Tim Ford, chairman and CEO of Expeditrix. “Given the increasingly selective funding climate, endorsement from these leading investors is a true validation of our market focus, seasoned team and strategy. Our new venture partners bring a wealth of operational experience. Their backing will prime Expeditrix for rapid growth and allow us to take advantage of an enormous market opportunity.”

And over on the stock exchange, Cornerstone Realty Income Trust, Inc., has joined the ranks of real estate firms expanding their stock buyback programs.

The real estate investment trust (NYSE: TCR) this week announced that its board has authorized the repurchase of up to an additional $50 million of its common shares. Cornerstone’s original program, authorized a year ago, has been completed.

Share repurchases under the new program will be made in the open market at prevailing prices.

“We continue to believe that our stock is undervalued at its current price and that the repurchase of our shares is a prudent investment that will increase shareholder value short term and long term,” said Glade Knight, chairman and chief executive officer. “Our stock continues to trade at a discount to net asset value, and this situation provides us with an excellent opportunity to make another sizeable investment in the company for the benefit of our shareholders.”

With a price-to-earnings ratio hovering below 13, Knight is right – his stock is undervalued. The repurchase program of the last year has had some positive effect, helping to raise the per share price from under $9 to near $11. But the new repurchase program will have to do better than boost the stock by a couple of bucks to satisfy frustrated investors.

Published: October 11, 2000

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