Real Capital Solutions (RCS), a Colorado-based real estate investment firm, has launched a new fund with a volume of $350 million. This fund will focus on acquiring distressed Class A and B office properties in the United States. The fund, named RCS Contrarian Office Fund, plans to achieve a transaction volume of up to $850 million through leverage. The fund's capitalisation is already secured by a personal commitment of $50 million from Marcel Arsenault, the founder and CEO of Real Capital Solutions, as well as a further commitment of $47.5 million from an unnamed entrepreneur.
The fund is expected to close in the first quarter of 2027. Marcel Arsenault expressed confidence: "Although the office market continues to experience a reset, we believe the long-term outlook for premier office properties is extremely strong." He emphasised that companies continue to need high-quality workplaces to attract tenants, foster innovation, and drive growth, and that such assets will outperform in the long term.
Contrarian Investment Strategy in Turbulent Times
This is not the first time RCS has been active in the office market during times of distress. Since 2024, the company has already invested $644 million in acquiring 14 office properties across 10 US markets. These acquisitions include, for example, Walnut Glen Tower and Tower at Park Lane in Dallas, Belleview Tower in Denver, Tysons Pointe in Northern Virginia, 101 Marietta Street in Atlanta, and the Equitable Building in Chicago. The latter, a 35-storey Class A office tower, was acquired earlier this year for $132.5 million, representing a discount of 77.8 per cent compared to its replacement cost.
Adam Abeln, Chief Investment Officer and Managing Director at RCS, attributed the company's recent investment activities to a "contrarian approach" that RCS has always pursued. He explained that one is typically rewarded when pricing becomes disconnected from market fundamentals. Abeln noted that the entire office market is currently being painted with the same brush, and discounts are across all categories, regardless of whether they are trophy properties or Class A, B, or C buildings. The new $350 million RCS Contrarian Office Fund has already identified potential acquisition targets in at least 15 different markets.
RCS's history demonstrates a consistent strategy of investing during market downturns. Marcel Arsenault founded RCS 42 years ago and began investing in distressed commercial real estate during the savings and loan crisis of the late 1980s and early 1990s. Since 2008, RCS has achieved a return of 24 per cent across 177 investments, according to its own statements. In total, since its founding in 1984, the company has invested over $5 billion in more than 400 commercial property acquisitions. Abeln emphasised that prior to the global financial crisis, RCS sold 80 per cent of its portfolio and took a short position in the residential property market to invest $100 million of capital into the then-emerging distressed properties.
The company was also strategically positioned before the downturn in 2020. Abeln reported that the company reduced its commercial property portfolio before the Covid-19 crisis. This proved advantageous, as after the pandemic, the opportunity was used to get into a favourable position and invest in income-producing properties. RCS now aims to continue this strategy in the office sector in the late 2020s. From their perspective, they were aware of a value shift in the office sector, even if it might have unfolded differently than in previous cycles. It was worthwhile deploying capital there.
