The Biggest Funds Raised In 2020 Have $24B To Spend On Post-Pandemic Real Estate
Real estate sages like Blackstone's Ken Caplan called it early in the downturn: Opportunities to pick up real estate bargains brought about by COVID-19 wouldn’t start to emerge until 2021. So 2020 was a good time to raise capital and get ready to invest.
Here are the seven biggest funds raised in 2020 looking to invest in North America, according to data from Preqin, as well as info on those currently raising equity. These are the firms likely to be making a splash as distressed opportunities begin to emerge.
Blackstone Real Estate Debt Strategies IV
Real estate giant Blackstone announced in September that it had raised $8B for its fourth real estate debt fund, the largest real estate debt fund ever. The head of its real estate debt business, Jonathan Pollack, said on the firm’s website that the economic environment created by COVID-19 brought about opportunities for alternative lenders like debt funds. The fund will provide loans across the world and provide all types of debt, from senior lending to mezzanine and preferred equity.
Rockpoint Real Estate Fund VI
In June, Boston-based Rockpoint raised $3.8B for its sixth opportunity fund, for which it began raising capital in 2019. Deals the fund has undertaken so far include a $300M investment in October in a single-family rental joint venture it has formed with sector specialist Invitation Homes. The JV could ultimately deploy as much as $1B in the sector in the western U.S., southeast U.S., Florida and Texas.
Vintage Real Estate Partners II
Not all of the opportunities brought about by the pandemic will come in the form of buying hard assets. In May, Goldman Sachs completed the capital raising for Vintage Real Estate Partners II, a $2.75B fund that will buy stakes in other property funds, acquiring units from investors that are looking for liquidity. In August, it provided finance to a mortgage REIT run by Colony that needed capital because of the impact of COVID-19.
Sculptor Real Estate Fund IV
Sculptor Capital is the name since 2019 of Och-Ziff Capital Management, a hedge fund that set up a real estate arm in 2003. In May, it announced that it had raised $2.6B for its fourth opportunity fund, significantly larger than its $1.5B predecessor. The fund can invest in Europe as well, but North America will be its primary focus, and befitting the firm’s roots in the world of hedge-fund investing, it provides mezzanine loans and preferred equity and can buy shares in listed companies as well as buying direct assets.
Westbrook Real Estate Fund XI
Low-profile investor Westbrook Partners has amassed $2.54B for its 11th value-add fund, which has the ability to invest in North America and Europe. It has typically favoured smaller deals, such as a 200K SF office building at 12950 Worldgate Drive in Herndon, Virginia, near Washington, D.C., bought for $53M at the end of last year.
Oak Street Real Estate Capital Fund V
The only fund among the list of biggest equity raises that is not looking to invest in value-add or distressed assets is Oak Street’s fifth real estate vehicle, which, as with previous iterations, will invest in net-lease assets across the U.S. The fund raised $2.5B in March, more than double the amount of its predecessor.
DivcoWest Fund VI
DivcoWest announced in September that it had raised $2.25B for its sixth value-add fund, well ahead of its equity target of $1.5B. It said it would use the capital to “pursue the acquisition of existing value-add life science, R&D and office properties in U.S. innovation markets.”
In The Market Now
According to Preqin, several other managers are in the market raising equity for major funds right now. Starwood is looking for $11B for its 11th opportunity fund; Digital Colony is looking for $6B for a fund buying assets like data centers, cell towers and industrial properties; GLP is looking for $2B for a new fund buying industrial assets; and JP Morgan is looking for $2B for a fund to provide real estate debt.