Eva Poon

US and European LPs say they are continuing to grow their mandate for real estate, with private equity the investment vehicle of choice, according to a survey by JER.

The real estate investment management firm’s latest vehicle is targeting $1 billion to invest in high-yield commercial and other real estate debt.

Real estate investors and lenders are expected to target US coastal centres, such as San Francisco and Seattle, as capital continues to flow away from secondary and tertiary markets, according to a report by the Urban Land Institute and PricewaterhouseCoopers.

The total capital raised by dedicated Asia real estate vehicles in 2008 to date has surpassed those targeting all other regions worldwide, according to data by PERE.

Firm CEO Robert Brunswick tells PERE market conditions had ‘accelerated’ its focus on being a principal investment business.

The vehicle would allow the Australian property fund manager to take a 50% stake in two development projects in Hong Kong. Goodman CEO, Gregory Goodman, said the vehicle was the largest of its kind in the country.

The private equity real estate arm of the bankrupt investment bank could be bought out by the management team, including Mark Newman, Brett Bossung and European head Gerald Parkes, according to media reports. In August, Lehman Brothers Real Estate closed its latest global fund on $3.2bn.

The coming year could see prices drop in the US by as much as 20 percent next year, according to research by real estate investment firm Blumberg Capital Partners. Buying opportunities exist, CEO Philip Blumberg argued, though the commercial real estate market would not bottom out until mid-2009 or 2010.

Investcorp president and chief operating officer Gary Long says the Bahrain-based firm’s investments portfolios were ‘under pressure’ owing to volatility in the financial markets.

The real estate investment firm has picked up the 20-story One BriarLake Plaza office tower in Houston, Texas. The deal follows on the firm’s opening of a German office earlier this month.