Real estate funds receiving record investment post-crash

Blackstone, Starwood and other bigwigs getting lion's share of money

TRD New York /
Apr.April 22, 2015 12:36 PM

Real estate funds are receiving more investment from pension funds, endowments and institutional investors than at any point since the property bust, with a few large firms collecting most of the spoils.

Investors have poured money into real estate in search of better returns than they would see from bonds, according to David Hodes of consultancy Hodes Weill & Associates.

Most of the money is going to private-equity firms with large real estate funds and strong track records, according to the Wall Street Journal. Funds of more than $1 billion accounted for 64 percent of all the capital raised this year – up from 31 percent in 2012, according to data tracker Preqin.

Blackstone Group recently reported annualized returns of 18 percent for its real estate funds launched since 1992, not including the one that just closed. The firm raised $14.5 billion for its most recent fund. Barry Sternlicht’s Starwood Capital Group recently raised $5.6 billion, according to the newspaper.

Overall, 210 global closed-end funds raised a post-bust record $97.7 billion in 2014, more than double the $46.8 billion raised in 2010. Funds pulled in a record $137.5 billion in 2008. [WSJ]Rey Mashayekhi

Related Articles

From left: 254 Water Street, 45-01 Northern Boulevard and 34-08 46th Street (Credit: Google Maps)

Here’s what the $10M-$30M investment sales market looked like last week

Here’s a look at Blackstone’s industrial plays after its record-breaking portfolio purchase

From left: 305 East 47th Street and 286 River Avenue (Credit: Google Maps)

Here’s what the $10M-$30M NYC investment sales market looked like last week

From left: Jonathan Gray and Steve Schwarzman with Stuyvesant Town

Behind Blackstone’s “capital strike”

October Issue is Live

The Real Deal‘s October issue is now available to subscribers!

Clockwise from top left: 2-34 Beach 102nd Street in Far Rockaway, 175 Canal Street West in Mott Haven, 102 Fulton Street, and 71 Smith Street in Boerum Hill (Credit: Google Maps and StreetEasy)

Here’s what the $10M-$30M NYC investment sales market looked like last week

Blackstone buys Colony Capital’s warehouse portfolio for $6B

Here’s why landlords don’t hate California’s rent control bill