From London To Miami, Hedge Funds Are Buying Into Real Estate

Two of the world’s best-known hedge funds are taking on real estate deals in the UK and U.S. as financial investors spot an opportunity in the sector due to asset and share price declines.

In the UK, GoldenTree Asset Management agreed to buy a listed property company that was in wind-down mode, and Elliott Management is continuing a London office buying strategy.

Elliott is also in talks to buy a large office block in Miami, and a fund it set up has agreed to fund a Miami condo tower.

GoldenTree specialises in credit investments, while Elliott is typically an activist investor that takes stakes in public companies and pushes the board for change.

Abrdn Property Income Trust said Friday that it had accepted an offer from GoldenTree to take the company private for £351M. That price is a premium of 7% to the company’s shares before the offer was announced but a 13% discount to the net asset value of the company.

APIT said in May that it would liquidate its portfolio because its shares were trading at a consistent discount to its NAV.

APIT’s portfolio has a big weighting toward industrial, as has been the case when other portfolios in the UK were bought by hedge funds and private equity firms. That sector accounts for 48% of its assets, with retail making up 25%, offices 21%, and the remainder small assets in other asset classes.

Elsewhere in the UK, Elliott backed the recent purchase of 14 St George Street in the Mayfair district of London for £125M. In January, it bought a £300M portfolio of assets in a mix of sectors in the West End from the Langham Estate. The 27 assets total 430K SF.

In Miami, Elliott is in talks to buy office building 701 Brickell for $450M from Nuveen, Bloomberg reported. The 685K SF, 33-storey tower is leased to tenants that include Apollo Global Management and Bank of America. It was originally put up for sale at $500M.

Earlier this month, Tyko Capital, a debt fund backed by Elliott, lent Related Group and Integra Investments $527M to build a 50-storey condo building in Brickell. The condos will be operated by hotel brand St. Regis.

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