In an effort to branch out its offerings, Los Angeles-based real estate investment firm SCI Real Estate Investments announced the formation of SCI Capital Group, LLC, an affiliate that will specialize in real estate securities and fund offerings.

SCI to date has been one of the largest players in the tenant-in-common market — a structure that groups capital from small 1031 investors into pools that acquire commercial properties. In that space, SCI has grown considerably and estimates it will complete $750 million in deals in 2007 — up from $500 million in 2006. That ranks it as the second largest TIC sponsor.

But the company is now ready to branch out and wants to complement its TIC expertise with more conventional real estate funds. “By 2008, I think we will have a 50/50 balance between these two businesses,” says Scott Derrick, chief acquisitions officer for SCI.

The new venture will build on SCI's existing customer base and infrastructure and focus on joint ventures, ground-up development and valued-added opportunities across a number of asset classes.

It has hired a handful of personnel to start the business and is actively looking for more professionals to build up those operations, Derrick says.

As of September, the firm already named Calabasas, Calif.-based AFA Financial Group, LLC as its managing broker-dealer and announced the appointment of Erica Weiser as senior vice president of securitized investments with SCI Capital Group. It also launched an affiliate Web site, scicapitalgroup.com.