Canadian investment manager Brookfield Asset Management raised $5.9B for its new real estate opportunity fund in the first quarter of 2025, bringing the total raised for the fund to about $16B.
Brookfield Strategic Real Estate Partners V, which is targeting distressed assets, is “on track to be our largest real estate strategy raise ever,” Brookfield Asset Management President Connor Teskey said on the company's first-quarter earnings call Tuesday.
“The world needs more great real estate, but there is a very significant lack of new supply in major markets and high-quality assets around the world that is creating a very robust supply demand dynamic in those who can bring capital to the market.”
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The pace of fundraising for the investor's real estate strategy skyrocketed this quarter, up from $500M in Q4 2024.
Teskey said a number of legacy capital structures are ill-suited for the current interest rate environment. That has created attractive opportunities to buy quality assets at significant discounts to replacement costs, and the fund has already begun targeting some of them.
BAM deployed $1.8B into real estate this past quarter, including investments in global logistics platforms in North America, Europe and Asia. The company also invested more than $100M of equity into a portfolio of 3,800 U.S. single-family rental properties.
While different asset classes and different geographies around the world will bottom out at different points in the real estate cycle, Teskey said the fund's expansive timeline for deployment is its major draw.
“The strength of this fund-raise was very indicative that investors realized this fund will deploy capital from 12 months ago to two or three years into the future, and no doubt, we are going to catch the bottom during that time frame,” Teskey said.
BAM started raising capital for the fund in 2023 with a target of $15B in equity. The previous opportunity fund in the series raised $15.3B in 2021.
The volatility surrounding the Trump administration's tariffs could also play into the company's strengths, Teskey said. Trade policy will lead to a focus on energy and data security as well as onshoring and deglobalization. All of those require huge amounts of capital, and Brookfield is a large manager of that type of capital globally, he said.
But “while it would be reckless to diminish the impact of tariffs and what they've done to markets, we really don't see it changing our fundraising trajectory,” Teskey said. “Any changes in allocations are going to be de minimis and on the margin.”
The fund has already invested about a quarter of its holdings mostly on apartment buildings and warehouses, according to The Wall Street Journal. Lowell Baron, chief investment officer of Brookfield’s real-estate group, told the outlet prices are about 20% to 40% below what the properties would have traded for at their peak.
“While the near-term outlook remains uncertain, our long-term strategy is unchanged, and we are well-positioned to navigate this environment,” Teskey and CEO Bruce Flatt said in a letter to investors Tuesday.
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