Extell, Starwood alums seek $500M for “contrarian” investing

Sush Torgalkar and Lanhee Yung aim to close the fund in 2021

Lanhee Yung and Sush Torgalkar (Photos via Cornell; Getty)
Lanhee Yung and Sush Torgalkar (Photos via Cornell; Getty)

Two former executives at Starwood Capital Group and Extell Development are starting a fund to capitalize on undervalued properties in and around New York City.

Sush Torgalkar, who until August was CEO at Extell Development, and Lanhee Yung, who was previously head of fundraising and investor relations at Starwood, hope to raise $500 million for their first fund under the auspices of Sage Hall Partners, the New York-based firm the two founded, Bloomberg News reported.

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The fund will focus on hotel, industrial, office, retail and residential properties in the greater New York area, including Long Island, Westchester, New Jersey and Southern Connecticut. The pair hope to debut the fund in early 2021.

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In an interview with Bloomberg, Torgalkar said that the move was “contrarian,” but added that lower valuations would present an opportunity to buy. “I have a hard time believing that this pandemic is going to kill the dream of people wanting to move to New York City,” Torgalkar said.

Torgalkar and his partner Yung met at Cornell University, where one of the buildings is named Sage Hall. In August, Torgalkar, who has a reputation for his connections to institutional investors, ended his two-year stint as Extell Development’s CEO. Extell Chairman Gary Barnett told The Real Deal in August that he will serve as a “potential investor and advisor” at Torgalkar’s new firm.

Other firms are eyeing opportunities as the pandemic wears on, too. In September, Blackstone Group closed its biggest real estate debt fund ever, raising $8 billion in the span of one year. The fund will make new loans, buy real estate debt securities and make other investments. The asset management arm of JPMorgan Chase is looking to raise $700 million to develop single-family and multifamily rentals in Sun Belt states.

[Bloomberg News] — Georgia Kromrei