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Oaktree, Reef Technology Launch $300 Million Property Fund

Reef and Oaktree’s infrastructure arm have formed a Neighborhood Property Group to acquired strategic real estate assets.

(Bloomberg)—Reef Technology Inc., a startup that manages hubs in parking lots used for food delivery and other services such as Covid-19 testing, launched a $300 million fund in partnership with Oaktree Capital Management LP.

Reef and Oaktree’s infrastructure arm have formed the Neighborhood Property Group to acquire strategic real estate assets, the companies told Bloomberg News on Monday. The new business will partly target areas experiencing population booms after people left cities such as New York and San Francisco because of the pandemic.

Miami-based Reef is also exploring a capital raise to fund its expansion, according to people familiar with the matter. The targeted valuation of the startup, formerly known as ParkJockey, couldn’t immediately be learned, but Reef was valued at $1 billion when SoftBank Group Corp. acquired a stake in 2018.

“Reef fits our thesis that core parking facilities should be augmented with technology to transform these core assets into mobility infrastructure hubs,” Josh Connor, co-portfolio manager of Oaktree’s infrastructure investing strategy and chairman of Neighborhood Property Group, said in an emailed statement. “These alternative uses support communities with critical last block logistics solutions such as food delivery, micro-mobility, same-day parcel delivery, essential groceries and electric charging infrastructure.”

Neighborhood Property Group will seek to partner with policymakers and small businesses. Reef operates more than 4,500 spaces for last-mile delivery services, such as cloud kitchens and logistics companies. These hubs, centered around parking lots and garages, then serve as logistics hubs for e-commerce firms or for other purposes. Last month, it said it had teamed up with Carbon Health to provide pop-up Covid testing clinics.

Food Delivery

Cloud kitchens have become an increasingly popular business model for food-delivery providers. Meals are prepared through a network of tightly packed kitchen spaces in affordable locations, cutting back on overhead from managing a restaurant. Food delivery platforms then provide the software to help route orders to customers.

Uber Technologies Inc. co-founder Travis Kalanick launched his own cloud kitchen startup, and also invested in India’s largest shared-kitchen company. Investors including Andreessen Horowitz and Sequoia Capital have also backed cloud kitchen rivals.

© 2020 Bloomberg L.P.

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