Related Companies, one of the nation’s most prolific real estate development and investment firms, today announced the final closing of the Related Real Estate Recovery Fund with equity commitments of $825 million. The distressed asset fund’s target of $750 million was exceeded due to high investor interest and strong investment deal flow. This ranks the fund among the biggest U.S. real estate-related vehicles raised in 2011, and one of the largest operator-led investment funds. Included in the roster of limited partners are some of the world’s most prominent sovereign wealth funds, public pension plans, multi-managers, endowments and family offices. The program’s primary investments focus is on the acquisition of distressed loans that were originated for new development, property conversion and renovation, as well as equity positions in properties that require significant repositioning utilizing Related’s diverse real estate expertise. The fund is managed by Related Fund Management LLC, the fund management platform of Related. Greenhill & Co., Inc. served as the fund’s exclusive global placement agent in the transaction.
“Our global real estate footprint and vertically integrated in-house suite of real estate services creates a one-stop shop for sourcing, due diligence, financing, construction, design, leasing, sales, asset management and financial reporting. With Related’s decades of real estate operational expertise, diverse finance experience and a history of managing private and public funds, our fund management platform and its focus on project execution is a natural extension of Related’s core competencies,” said Related Companies President Jeff T. Blau.
Justin Metz, Managing Principal of Related Fund Management said, “We are thrilled with the response we have received from the investor community who share our strategic vision to unlock value through the pursuit of off market, execution-focused property deals. Our focused strategy, access to deal flow and deep skill set enable us to move quickly on investments, differentiates us in the marketplace and offers a compelling and distinct investment opportunity.”
Related made the strategic decision to build a private equity real estate fund business in order to offer its institutional partners unique investment opportunities capitalizing on the recent property market distress that the organization was seeing in the U.S. markets. The company launched the fund management platform by hiring real estate dealmaker Justin Metz, formerly of Goldman Sachs, in 2009 to build out a team. Related Fund Management is staffed by 20 seasoned professionals and currently manages approximately $1.5 billion of equity capital on behalf of sovereign wealth funds, public pension plans, multi-managers, endowments, Taft Hartley plans and family offices across three areas: distressed real estate opportunities, origination and acquisition of construction loans, and multi-family housing opportunities.
The Related Real Estate Recovery Fund has made several investments including 111 West Wacker Drive in Chicago, 511-541 West 25th Street, 225 Rector Place and One Madison Park in New York City, Oasis in Fort Myers, Florida and a fund portfolio recapitalization. ###