AEW Capital Management has held a first close for its seventh opportunistic real estate fund.
Although representatives from AEW declined to comment, sources familiar with the matter told PERE that the Boston-based real estate investment management firm has held a first close of $89.2 million for its AEW Partners VII fund. As previously reported, AEW Partners VII is targeting $500 million in commitments.
Investors in the fund thus far include the Illinois Municipal Retirement Fund, which approved a commitment of $25 million to the fund in the fall, and the San Francisco Employees’ Retirement System, which committed $40 million to the vehicle last month. The fund already has received additional commitments, but those contributions will be counted towards the second close, sources said.
Through the opportunistic vehicle, AEW is looking to buy nonperforming and defaulted loans where title to the underlying property can be obtained, as well as high-quality, well-located assets at significant discounts to replacement cost from owners forced to sell. In addition, the global manager also is looking to acquire or recapitalize properties with broken capital structures where the real estate is not functionally challenged. Although the bulk of investments made on behalf of AEW Partners VII will be in North America, the firm can invest up to 15 percent of the capital outside the region.