Related Companies, one of the nation's leading private real estate development firms, today announced a nearly $1.4 billion equity and debt investment, the first outside investment in the company. Goldman Sachs and MSD Capital, LP have purchased equity stakes in Related totaling 7.5 percent. Three international entities will also invest through a debt placement, including an affiliate of Mubadala Development Company and The Olayan Group.
In addition to the corporate investment, each investor will co-invest in future development opportunities undertaken by Related. This elite group of investors has been specifically selected to fund future growth. The minority investment in Related includes no involvement in the governance of the company and there will be no change in Related's management structure.
"This is a historic transaction for Related which will enable us to write a new chapter of our growth. This carefully-selected, prestigious group of investors will allow us to reinforce our position as one of the nation's leading developers, managers and financiers of premier real estate properties," said Related Chairman and CEO Stephen M. Ross. "In the last decade, the size, scope and geographic diversity of Related's development pipeline has increased dramatically with Time Warner Center and Moynihan Station in New York City, Grand Avenue in downtown Los Angeles, CityPlace in West Palm Beach, CityNorth in Phoenix and Snowmass Village in Colorado. As the industry continues to move toward bigger, more complicated development transactions, these new financial partnerships ensure that Related has a ready and deep source of capital to take advantage of virtually any opportunity regardless of size or scale."
Related President Jeff T. Blau said, "This access to new capital offers Related a tremendous competitive advantage. We are currently involved in some of the most ambitious real estate developments in the nation and are competing for a once-in-a-lifetime opportunity-to create a 26-acre, vibrant mixed-use waterfront neighborhood at the West Side Yards in New York City. This investment into our company is more than a financial arrangement. These long-term relationships will provide us with the financial flexibility to capitalize quickly on even the most challenging future opportunities. Above all else this show of confidence from the world's most elite investors is a testament to the strength of our team-a group of the brightest and most innovative and skilled employees, who are truly the best in the industry."
Related's current pipeline is comprised of marquee projects across the nation including: Grand Avenue, a multi-phase 3.6 million square foot, $3 billion development spanning three city blocks in downtown Los Angeles, California; the $3 billion, 80-acre Snowmass Village Resort development in Colorado; the 144-acre CityNorth mixed-use development in Phoenix, Arizona; and the development of the 7.5 million square foot Moynihan Station complex in New York City.
Stuart Rothenberg, Global Head of Real Estate Principal Investments at Goldman Sachs, said, "We're excited to make a strategic investment with a best-in-class developer and highly skilled management team. Related has a history of creating value and has developed some of the country's most financially successful projects."
Barry A. Sholem, Partner responsible for MSD Capital's Real Estate Group, said, "MSD Capital is pleased to make this equity investment in Related, which is led by one of the strongest management teams in the business. Related is developing some of the most exciting projects in the country, and we look forward to growing our partnership with them over the long term."
Khaldoon Khalifa Al Mubarak, Mubadala CEO and Managing Director, said, "Related is a strong fit for Mubadala. We share their approach to investing in premier projects that build long-term value. Related has great leadership and an impressive project pipeline with even more potential opportunities."
Anthony S. Fusco, The Olayan Group's U.S. vice president for real estate, said, "This investment continues our organization's strategy of creating long-term alliances in all of our lines of business with strong, qualified, strategic partners. As a top developer and property manager in the U.S. market, Related certainly fulfills that role." Related was advised by a team that included Goldman Sachs, Deutsche Bank and Eastdil Secured.
About Related Companies: Heralded as one of the most prolific and visionary developers in the country, Related Companies was formed over thirty-five years ago. Today Related is considered the most prominent privately owned real estate development firm in the United States, headquartered in New York City with divisions in development, acquisitions, property management, marketing and sales. In 2004, Related completed the development of New York City's newest landmark, Time Warner Center. Related has offices and major developments in Miami, Los Angeles, San Francisco, Chicago and Boston and boasts a team of more than 2,000 professionals. To date, Related has real estate assets worth over $15 billion with another $9 billion currently in development. In Los Angeles, Related is expanding its portfolio with The Century, a super-luxury condominium in Century City and the Frank Gehry-designed Grand Avenue development.
About Goldman Sachs: Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world. For more information, visit www.gs.com.
About MSD Capital, L.P.: MSD Capital was formed in 1998 to exclusively manage the capital of Michael S. Dell and his family. The firm currently manages in excess of $12 billion in assets and participates in a broad range of investment activities, with its primary focus on investing in publicly-traded securities, real estate and traditional private equity. For more information, visit www.msdcapital.com.
About Mubadala Development Company: Mubadala is an investment and development company headquartered in Abu Dhabi, the capital of the United Arab Emirates. Wholly-owned by the Abu Dhabi Government, Mubadala's mission is to create and maximize long-term returns as an engaged investor in high-performing businesses and promising new ventures. The company has a growing and multifaceted international portfolio, with significant interests in sectors such as energy, telecommunications, infrastructure, real estates and aerospace. For more information, visit www.mubadala.ae. About The Olayan Group: Founded in 1947, The Olayan Group is a private, multinational enterprise that is both a leading diversified business in Saudi Arabia and a major investor internationally. The group comprises some 50 companies and affiliated businesses engaged in product distribution, manufacturing, services and investment. It has offices in New York, London, Athens, Vienna, Riyadh, Al-Khobar and Jeddah. For more information, visit www.olayan.com.