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.
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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