Firm of the Year
In a year in which logistics transactions dominated headlines, it was Starwood’s efforts in other asset classes that helped bag this year’s Global Firm of the Year award. Starwood wrested the much-coveted title from last year’s winner Blackstone after masterminding a number of needle-moving transactions, notably in the residential sector. North American deals were among its biggest, with the privatization of a $3 billion multifamily portfolio from Milestone Apartments REIT as a standout example. The $815 million capture of 3,100 single family abodes to its JV with Colony Capital, Colony Starwood, was another.
Not all the action centered on American homes, though. An investment in a UK housing regeneration business called Pinnacle Group and another in a hotel development joint venture with Hong Kong’s Shimao Property Holdings were among its other notable outlays. Let’s not forget the small matters of the launches of its first core-plus fund and non-traded REIT, as well as the raising of $7.3 billion for its latest opportunity fund, Starwood Opportunity Fund XI Global.
Industry figure of the Year
1 Jon Gray, Blackstone
2 Francois Trausch, Allianz
3 Brian Kingston, Brookfield
Blackstone’s prodigal son retains the Global Industry Figure of the Year award, his sixth personal triumph, nudging him ahead of Starwood’s Barry Sternlicht. There’s something fitting about Gray’s win as Blackstone set about offloading the last of the properties in the Equity Offices Group portfolio – the $39 billion privatization he masterminded a decade ago. The deal still ranks as the biggest buyout of all time. Gray’s winning reputation was propelled following the acquisition of the 543-property, 103.1 million-square-foot deal and he has not looked back since.
Gray has long been mooted as the successor to lead Blackstone, so it was little surprise when the firm announced last month that he had been promoted to president, replacing Tony James, who became executive vice-chairman. He hands the reins to CIO Ken Caplan and COO Kathleen McCarthy. This means Gray will likely be out of the reckoning for this award next year. Sternlicht will no doubt take note.
Deal of the Year
1 Blackstone’s sale of Logicor to CIC for €12.25bn
2 Greystar’s $3bn privatization of US apartment REIT Monogram Residential
3 Global Logistic Properties’ purchase of Gazeley for $2.8bn
If ever you were looking for a sign that 2017 was the year of the shed, two of three top-voted contenders for PERE’s Global Deal of the Year were logistics-oriented. It was always going to be hard to beat Blackstone’s offload of Europe’s biggest logistics portfolio. It was a textbook example of aggregating a sizeable portfolio, installing capable management and offloading to the highest bidder and will no doubt be considered a case study for years to come.
In just five years and over 50 deals, Blackstone amassed a portfolio of 147 million square feet across 17 European countries – albeit with a concentration in the more prosperous UK, Germany, France and parts of southern Europe – using capital from its BREP Europe III and IV and BREP VII opportunity funds. Installing sound management led by ex-AMB Property Europe boss Mo Barzegar as chief executive in 2013 gave institutional heavyweight buyers the confidence to pursue the company and after a more than year-long process, China’s CIC beat rival bidders to buy it for a sector record price.
Institutional Investor of the Year
2 GIC Private
3 Ivanhoé Cambridge
In a very close contest, the property division of German insurer Allianz emerged victorious thanks to an array of investments across regions. American outlays were among the Munich-based investor’s headline-grabbers, including for a 43 percent stake in New York’s One Astor Plaza on 1515 Broadway, in a deal with SL Green Realty Corp valuing the skyscraper at $1.95 billion.
In Europe, it upped its logistics exposure by merging a €571 million portfolio with a bigger, Prologis-managed platform and bought one of Austria’s biggest commercial property developments, the Icon Vienna complex for more than €500 million. Ventures in Asia included up to $250 million with Sharpoorji Pallonji Group to buy Indian offices; $100 million to e-Shang Redwood’s second Japanese logistics fund and the $525 million purchase of SOHO Hangkou in Shanghai with Singapore’s Keppel Group.
Capital Raise of the Year
1 Starwood Opportunity Fund XI Global
2 Brookfield Real Estate Finance Partners V
3 Partners Real Estate Secondaries 2017
Barry Sternlicht’s Starwood was the runaway winner in the contest for Global Capital Raise of the Year, capturing more than half the votes. Cynics will point to no global raises by mega-fund rivals Blackstone, Lone Star or Brookfield, but that would ignore the firm’s biggest fundraising yet. Starwood originally set an upper limit of $6 billion for Fund XI, but had already surpassed $7.3 billion by year-end, with a final close yet to be announced at press time.
According to one of the fund’s investors, the Connecticut Retirement Plans and Trust Funds, Starwood has not always hit its 14-16 percent net IRR/1.5-1.6x equity multiple targets. However, the last two vintages, Fund VIII and IX, are both understood to be performing among the top quartile as of late last year. The firm’s latest performances have smashed fundraising records, and as they say in sports: you are only as good as your last game.
Secondaries Firm of the Year
1 Partners Group
2 Landmark Partners
3 Stepstone Real Estate Partners
Partners Group retained the Secondaries Firm of the Year award thanks both to its fundraising and deployment exploits in 2017. Of the former, the Zug-based manager raised €1.2 billion of the €2 billion it was targeting for its Partners Group Real Estate Secondary 2017 fund in a first closing, revealed PERE in August. A final close was anticipated imminently.
Partners also made headlines for its direct investing in the development of its own London headquarters at 80 Fenchurch Street, a £200 million ($277 million; €226 million) project. Arguably its most interesting outlay was its programmatic venture with Stockholm-based SSM to build 1,700 apartments for €700 million, to include micro-units. And there was enough time for some bread and butter secondaries buying, the stakes in Colony Capital’s €1 billion Colyzeo Investors II fund being a prime example.
Multi-manager of the Year
1 CBRE Global Investment Partners
2 UBS Asset Management
3 Madison International Realty
This category saw the same one-two combination as last year, with CBRE’s partnerships-focused business winning, flanked by UBS’s multi-management real estate business. CBRE won last year in part for bringing the capital of its flagship core-plus, open-ended fund, Global Alpha Fund, to a net asset value of $2 billion; it has now passed $3 billion.
The deals are looking different, however. Chief among them was the formation of a UK logistics venture with heavyweight Prologis, investing than £1 billion ($1.38 billion; €1.13 billion) in the sector. The firm also concluded investing its $840 million European Co-Investment Fund and bought 25 medical offices in the US in a deal valued at more than $500 million. Such big tickets are now the norm from CBRE Global Investors’ star platform; small wonder it now accounts for about one-fifth of its total $98 billion of assets under management.
For the full list of awards and other winner profiles by region, click here.