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Starwood Rolls Out Plan For $11B CRE War Chest

Starwood Capital Group is reportedly planning to raise $11B specifically to bet on the prospects of post-pandemic commercial real estate. 


As much as $8B would be for its Starwood Global Opportunity Fund XII, which is currently fundraising and specializes in U.S. and European opportunistic real estate, Bloomberg reports, citing anonymous sources. Another $3B would go toward a sidecar fund to buy distressed properties.

Starwood is hardly alone in amassing dry powder for the wave of pandemic-inspired deals that investors anticipate. Preqin estimates that private equity firms worldwide now have an aggregate war chest of about $328B to use for real estate deals. Other estimates put that total a little lower, but massive nevertheless.

In May, Apollo Global Management started raising over $20B to take advantage of economic disruption, specifically by satisfying a surging demand for credit. Even earlier, Compound Asset Management began raising money for a new fund aimed at buying stakes in hard-hit real estate companies, specifically on real estate businesses in the hospitality and leisure sectors.

Across the Atlantic, Patron Capital has raised €770M ($911M) for its sixth European opportunity fund, while in May, Canadian investment giant Brookfield launched a new fund to buy European property.

Starwood is also interested in selling billions in assets. Bloomberg reported recently that Starwood Property Trust is mulling the sale of $2B in energy infrastructure loans that it bought from General Electric Co. almost two years ago.

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