Real Estate Bisnow: Bozzuto's Biggest Deal
July 28, 2010
In its nearly quarter century, Bozzuto Group has developed 25,000 apartments and bought 5,000 others, often via joint ventures with the blue-chip likes of JP Morgan, Northwestern Mutual, CIGNA, and the New York State Teachers' Retirement System. But yesterday it announced its biggest yet: a $75 million equity war chest into which it’s contributing but with the majority funded by Chicago icon Penny Pritzker and unveiled as the Bozzuto/Pritzker Realty Group fund.
Here’s a picture taken this morning of Bozzuto’s HQ in Greenbelt, with symbolic blue skies. Founder Tom Bozzuto tells us they were in the market looking for a capital partner, and Pritzker was also looking for someone to work with, a vote of confidence in the mid-Atlantic; together they’ll be looking at opportunities from NoVa to suburban Philly and perhaps even a little farther north, in class A, high-density, mixed-use, transit-oriented multifamily. Their shared vision? “We are about to enter a period when the rental market has been better than it has been in decades,” Tom says, due to both age demographics and a weaker home purchase economy. The $75 million, he figures, may support between $220 and $250 million in value and last a couple of years; if successful, it can be renewed.
Our Chicago reporter snapped Penny this spring at a Northwestern Univ. real estate conference. Although she’s long been a giant name in Chicago (currently #204 on the Forbes 400 list of billionaires) and came to national attention as candidate Obama’s finance chair, Tom tells us she is hands-on: The two of them have visited each other’s offices, and Penny has joined in Maryland and DC site tours. “She's a person of huge real estate sophistication,” he says.
Here’s Tom a couple hours ago in his office. The deal is not the only recent landmark in his life—he’s just back from a three week sojourn with his wife at a villa in Tuscany, outside Florence, where they celebrated their 40th anniversary. They go to Italy a lot, but because it was as hot there as here, they skipped the museums on this visit and just “blended into local culture,” getting a cup of espresso in the morning, a big meal at lunch, and a nap in the afternoon. “Toby and Dan Murphy can handle things,” said Tom referring, respectively, to his son and CFO.