Firm of the Year
1 Starwood Capital Group
2 The Carlyle Group
3 Harrison Street Real Estate Capital
Starwood Capital Group made a big splash in more ways than one in 2017. The Greenwich, Connecticut-based private investment firm, led by founder Barry Sternlicht, established two new real estate businesses last year. It began a new core-plus business at the start of 2017, after securing a $300 million separate account – with a gross return target of 9-11 percent – with the Teachers’ Retirement System of the State of Illinois. The firm also rolled out a non-traded REIT platform, launching Starwood Real Estate Income Trust, for which it seeks to raise up to $5 billion, in October.
Starwood also struck a string of major deals, the largest of which was a $20 billion merger between two single-family rental real estate investment trusts, Blackstone’s Invitation Homes and its own Starwood Waypoint Homes. The merger, which closed in November, created the largest single-family rental company in the US. Other notable transactions included the $2.85 billion privatization of Milestone Apartments Real Estate Investment Trust in April and the sale of a controlling stake in Mammoth Resorts to KSL Capital Partners-led joint venture in July.
Industry Figure of the Year
1 Chris Graham, Starwood Capital Group
2 Bill Tresham, Ivanhoé Cambridge
3 Hilary Spann, CPPIB
Reclaiming his trophy from 2015, Christopher Graham once again led the charge with Starwood Capital Group’s real estate investment activity in North America. As the firm’s head of real estate acquisitions for the Americas, Graham played a key role in pursuing investments on behalf of Starwood’s global opportunity funds, leading the firm to close on 16 transactions in the region last year. The deal volume amounted to an aggregate value of more than $6 billion, including over $1.8 billion of equity – albeit less than half of the $12.6 billion of deals involving $3.5 billion of equity when Graham last won the award, given an increasingly challenging investment climate.
Some of the notable deals done under Graham’s watch included Starwood’s acquisition of Milestone Apartments REIT’s portfolio of 78 apartment communities concentrated in Texas, the south-east and western US, as well as the Milestone property management business, which is now named Starwood Multifamily Management; and the purchase of the PCT Office Campus, a 1.5 million-square-foot, three-building office campus in El Segundo, California for $611 million.
Deal of the Year
1 Invitation Homes, Starwood Waypoint forming $20bn merger
2 Harvard’s $2bn sale of secondaries stakes
3 Morgan Stanley Real Estate Investment buying 100% of Mesa West Capital
Dallas-based Invitation Homes, already the largest single-family rental company in the US, became even bigger when it merged with Starwood Waypoint Homes in a $20 billion transaction in November. The combined company now operates under the Invitation Homes brand and owns and manages a portfolio of approximately 82,000 single-family homes across the US.
Blackstone founded Invitation Homes in 2012 and took it public in January 2017, raising $1.54 billion in its initial public offering. In 2014, Starwood Capital Group acquired single-family rental firm Waypoint Real Estate Group, whose lead investor was San Francisco-based GI Partners, and in conjunction with the acquisition, spun out its single-family rental platform as Starwood Waypoint Residential Trust. In 2015, Starwood Waypoint merged with Colony Capital’s single-family rental business, Colony American Homes, to become Colony Starwood Homes. Last year, Colony Starwood bought GI Partners’ Waypoint portfolio of 3,106 homes for $815 million and subsequently rebranded to Starwood Waypoint Homes.
Institutional Investor of the Year
1 Ivanhoé Cambridge
Ivanhoé Cambridge had a hand in two of the most prominent private real estate deals in North America last year. In July, the real estate subsidiary of Caisse de dépôt et placement du Québec acquired US light industrial firm Evergreen Industrial Properties from TPG Real Estate for a reported $1 billion. The transaction – which marked Ivanhoé Cambridge’s debut in the US industrial property sector – gave the investor a portfolio of more than 150 properties, comprising approximately 16 million square feet across 18 major US markets.
“We started looking at companies in the industrial real estate sector over two years ago with the intention of making a strategic investment in this asset class,” Arthur Lloyd, Ivanhoé Cambridge’s president of office in North America, said at the time.
Ivanhoé Cambridge was also a founding capital partner in Greystar Real Estate Partners’ new open-ended core-plus fund, Greystar Growth and Income Fund. The first close for the vehicle coincided with the fund’s seed investment, the $3 billion privatization of US apartment REIT Monogram Residential Trust.
Capital Raise of the Year
1 Greystar Growth and Income Fund
2 Blackstone Real Estate Income Trust
3 Carlyle Realty Partners VIII
Greystar Real Estate Partners trumped its much larger private equity rivals Blackstone and The Carlyle Group with its $2.3 billion fundraise for its first core-plus vehicle, Greystar Growth and Income Fund, which is believed to be the first multifamily-specific, open-ended core-plus real estate vehicle of scale. The Charleston, South Carolina-based multifamily investment firm was preparing to launch the fund at the beginning of the year, PERE reported at the time. By July, Greystar had raised $1.8 billion for the fund, as well as $500 million in co-investment capital, from Dutch pension fund managers APG and PGGM, Singaporean sovereign wealth fund GIC, and Ivanhoé Cambridge, the real estate subsidiary of Caisse de dépôt et placement du Québec.
The initial close coincided with the closing of the fund’s seed investment, the acquisition and privatization of publicly-traded Monogram Residential Trust in a $3 billion deal.
Following the first close, Greystar is understood to have collected additional capital for the fund, including $400 million from the National Pension Service of Korea and $211 million from Townsend Group’s multimanager platform.
Capital Advisory Firm of the Year
1 Hodes Weill
2 Park Hill
3 Shelter Rock
Hodes Weill & Associates handily won this category, garnering more votes than the next two runners-up combined. The firm advised Asana Partners on its debut retail-focused fund, which netted $500 million of commitments in January 2017, 25 percent over its target of $400 million. Hodes Weill also assisted Exeter Property Group with offshore marketing in connection with the Conshohocken, Pennsylvania-based Exeter Industrial Value Fund IV, a value-added industrial fund that raised a total of $1.275 billion at its final close in April, exceeding its $1 billion equity goal.
Outside of commingled funds, Hodes Weill worked with St Louis, Missouri-based ElmTree Funds on the capitalization of ETCL Venture, a $350 million separate account with a subsidiary of China Life Insurance Group. The venture, which will invest in core net lease properties, began with a $950 million recapitalization of a portfolio of 50 single-tenant properties owned primarily by an ElmTree fund. Hodes Weill also advised ElmTree on a $120 million core separate account with an unnamed Middle Eastern investor.
Law Firm of the Year: Fund Formation
1 Clifford Chance
2 Simpson Thacher
3 Morrison & Foerster
Its rivals in the category may have represented bigger names in the private equity real estate industry, but Clifford Chance nonetheless prevailed for its fund formation activities in North America. Among the fund managers the firm advised were Berkshire Group, which raised $1.05 billion in the first and second closes in September and October for its first debt fund, Berkshire Multifamily Debt Fund II, against a $1.25 billion hard-cap. The fund, which will focus on investments in Freddie Mac-sponsored multifamily debt products and other debt investments secured by multifamily real estate – represented the largest-ever capital raise for the firm.
Clifford Chance – whose US private funds practice is led by partner Roger Singer – also advised Basis Investment Group, a New York-based woman- and minority-owned private equity real estate firm, on the formation of its debt-focused debut real estate fund, BIG Real Estate Fund I, which had $400 million equity goal and attracted $185 million in its first close in November. The firm also worked with Exeter Property Group, which held a final close on $1.275 billion for Exeter Industrial Value Fund IV.
Law Firm of the Year: Transactions
1 Simpson Thacher & Bartlett
2 Mayer Brown
3 King & Spalding
Just as Blackstone has consistently stood out for its dealmaking, so has Simpson Thacher in its legal representation of the industry heavyweight’s major real estate transactions in North America. Far and away the largest of these deals last year was the $20 billion merger between Invitation Homes – which was 70 percent-owned by Blackstone prior to the deal close – and Starwood Waypoint, marking the largest-ever investment in the single-family rental property sector.
Simpson Thacher also acted as Blackstone’s legal advisor in its acquisition of a portfolio of 64 senior living properties from healthcare real estate investment trust HCP for $1.125 billion. The transaction, which closed in March, also included the formation of a joint venture between Blackstone and Brookdale Senior Living to own and operate the portfolio.
Additionally, Simpson Thacher worked on Blackstone’s acquisition of International Market Centers, the world’s largest owner and operator of showroom space for the furnishings, home decor and gift industries, from Bain Capital Private Equity and Oaktree Capital Management, in a deal that closed in September.
Firm of the Year: Latin America
1 GTIS Partners
2 Jaguar Growth
3 TC Latin America Partners
GTIS Partners was one of just a handful of real estate managers to have closed a Latin America-focused fund in recent months. The New York-based private equity real estate firm gathered a total of $680 million for its latest Brazilian real estate fund, GTIS Brazil Real Estate Fund III. The bulk of the capital came from two European investors, the Netherlands’ second-largest pension fund and Dutch pension fund manager APG Asset Management, which each committed approximately $250 million. GTIS actually held a final close on the fund in December 2016, but considered reopening it last year after receiving interest from other investors that did not make it into the final close. Ultimately, the firm decided against doing so.
GTIS agreed to sell management rights within its 1.2 billion reais ($370 million; €300 million) hotel platform Brazil Hospitality Group to global hotels group Accor to manage up to 21 hotels in Brazil for approximately 200 million reais in March. In December, it made an offer to buy all of the assets owned by BC Fund, the largest externally-managed REIT in Brazil, for 2.33 billion reais.