John Grayken’s real estate investor, Lone Star Fund, has launched a new property fund with the aim of raising $5 billion, Bloomberg News reported. The Dallas-based firm has begun seeking pledges for Fund VIII, with initial commitments scheduled for completion at the end of February, according to Anthony Breault, senior investment officer for real estate at Oregon’s pension fund, one of Lone Star’s largest backers.
“The decision is primarily a staffing allocation and time consideration,” Breault said. “I expect Lone Star will be able to achieve the targeted fund raise, given enough time.”
Lone Star’s model is to buy distressed assets in order to restructure them and sell at a profit, both in the U.S. and overseas. Two of its largest recent buys include last month’s deal to buy commercial properties from the German government valued at about 1.1 billion euros ($1.4 billion) and today’s agreement to buy all of the Dutch property company Wereldhave NV’s U.S. real estate for $720 million. [Bloomberg] —Christopher Cameron