Related closes $825M distressed asset fund

January 23, 2012 04:30PM

Related President Jeff Blau and the Oasis at Fort Myers

Related Companies has closed the distressed asset fund that purchased debt on prime Manhattan and Florida properties, BusinessWeek reported.

The Related Real Estate Recovery Fund garnered $825 million of commitments, $75 million more than it targeted, to invest mostly in distressed debt with an eye on taking ownership of the properties. The fund has already invested $200 million in properties like One Madison Park and 225 Rector Place in New York and the Oasis in Fort Myers. It will invest further in those markets along with Chicago, Boston, Los Angeles and San Francisco.

“Our whole idea was to do all those deals that require heavy execution where there’s less competition so pricing is better,” Blau said.

According to the Financial Times, the fund was among the largest commercial real estate investment vehicles raised in 2011, and the largest run by a property developer. Vornado Realty Trust was a close second, raising an $800 million fund. Investors embrace these funds because they only pay fees to the operator, and not to a fund manager as well as the operator. [BusinessWeek] and [FT]