Two Excelsior Group alums launch new company

By: Clare Kennedy

Two Excelsior Group executives are striking out on their own as real estate investors.

Principals Joe Boone and Jim Hegedus founded Water Street Partners LLC on Aug. 28, about two weeks after they left the St. Louis Park-based Excelsior Group. The new company is backed by a group of investors, whom Boone declined to name.

“We had an opportunity to get in on the ownership side,” Boone said in an interview. “That’s the reason.”

Boone was with the Excelsior Group for almost six years, according to a news release. In 2014 he was promoted to vice president responsible for acquisition, management and disposition of assets for investments affiliated with the company.

Hegedus, who was also a vice president at Excelsior Group, came on board in 2015. He oversaw daily operations of Excelsior’s real estate funds business and executed investment strategies. Before that, he worked at Madison, New Jersey-based Prudential Global Investment Management.

Water Street will buy existing properties, with an eye to making value-add investments. The company will also specialize in raising equity for outside development teams.

“Our goal is to create a very nimble firm,” Boone said. “We intend to hire third-party groups for services like construction and management.”

The new company already has at least one commercial real estate heavyweight in hand, thanks to a “strategic alliance” with Excelsior-based Oppidan Investment Co., which does its own development and offers management services for individual properties and projects.

“With this alliance we can hire Oppidan to perform services when it suits our investors and they can hire us on the capital market side,” Boone said.

Water Street will also have an office in Oppidan’s headquarters at 400 Water St. in Excelsior.

Boone has strong ties to Oppidan. He started his career in commercial real estate at the company and is the nephew of Oppidan CEO Joe Ryan.

Water Street is now looking for suitable acquisitions to create a large, diverse portfolio, Boone said, which will ideally include cash-flowing office, retail, industrial, multifamily or senior housing properties. From a geographic standpoint, Water Street will focus on the Minneapolis-St. Paul area and other markets where Oppidan does business, which include 26 other states and parts of Canada.

The average deal will total around $20 million, he said.

Water Street does not plan to invest in single-family housing.

This article about Water Street Partners comes from Finance & Commerce.