Sterling Bay launches $500M fund, eyeing more acquisitions

Sterling Bay is looking to raise $500 million for its third and largest investment fund as it continues its string of developments and gets set to launch its massive Lincoln Yards project.

The Chicago developer’s fundraising plan was revealed in disclosures filed with the U.S. Security and Exchange Commission, and a Sterling Bay spokesperson said the fund will target new projects and existing ones, according to Crain’s.

Sterling Bay exhausted two previous capital funds, which raised between $90 and $200 million each in 2013 and 2016.

The firm spent some $1.5 billion over the past year on the acquisitions of three trophy office properties alone: the Groupon headquarters at 600 West Chicago Avenue, Prudential Plaza and the office portion of the former John Hancock Center.

At the same time it’s continued to be a key player in the transformation of Fulton Market, launching a number of projects while continuing to acquire more properties.

All those developments would be dwarfed by Lincoln Yards, the sprawling $6 billion mega-project on the North Branch of the Chicago River. Sterling Bay is now navigating through an approval process with area community groups and Alderman Brian Hopkins (2nd).

The new funding round would allow Sterling Bay to move beyond its existing investment partners and tap deep-pocketed investors such as public pension funds and endowments. Sterling Bay in September hired Scott Rafferty as director of investor relations, tasking the former executive at Ken Griffin’s hedge fund giant Citadel with building relationships among those large investors, according to Crain’s.

Rafferty’s hiring is one of several big personnel moves for Sterling Bay.

In July, the firm hired industry veteran Howard Blair as its director of construction. Two months later, its director of development, Erin Lavin Cabonargi, left to start her own development and consulting firm. [Crain’s] — John O’Brien