CBRE Global Investors and LaSalle Investment each raised more than $1 billion for new real estate investment ventures, according to the Wall Street Journal.
CBRE took in $1.34 billion in private equity this year that it will mostly direct at U.S. commercial properties, targeting annual returns of 12 to 13 percent. LaSalle raised $1.07 billion for a debt fund that will focus on Western Europe, particularly the United Kingdom. Lasalle will make senior loans to developers and investors as well as mezzanine financing.
But the fundraising comes at a difficult time for private equity, which has seen significantly less investment this year than in the proceeding two years with many investors unsure of how much longer the peak real estate market will last before it falls. Last year, private equity firms and other real estate-investment managers raised $126 billion. But this year, that tally stands at just $96 billion, according to research firm Preqin.
“Anybody who has been out there raising capital in this environment will tell you it’s pretty challenging,” said Vance Maddocks, CBRE’s American chief investment officer. [WSJ] —Will Parker