He said it
“For a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal for us. And it’s not a new normal. It’s an aberration that we’re going to correct as soon as possible.”
Goldman Sachs chief executive David Solomon on working from home, shared during Credit Suisse’s virtual financial services forum last week.
A secondary sale
The New York-based multi-manager Metropolitan Real Estate has a new home once again. Bought by The Carlyle Group in 2013, the secondaries specialist was sold to BentallGreenOak late last week. Real estate secondaries activity hit an all-time high last year, accounting for $8.5 billion of net asset value, per a report from Landmark Partners, driven by a widespread need for liquidity. So, it is of no surprise BGO would be keen to add the $2.4 billion operation to its growing enterprise. Sonny Kalsi, chief executive of the $53 billion firm, says the move gives BGO another set of investment opportunities to offer investors.
Don’t call it a comeback
When the global financial crisis of 2008-09 struck, BlackRock’s third Asia property fund was overexposed to the Asia Square office towers in Singapore, causing onlookers to ring the death knell for the series. The firm needed a fund extension, had to write off money and permit high volumes of secondary trading to get through the ordeal. Now, after 12 years and a strategic dialing down of risk, the series is thriving once more. Our exclusive report yesterday [coverage here] of BlackRock Asia Property Fund V’s target-beating $1.175 billion close confirms the loyal support from institutional investors. Indeed, Asia real estate head John Saunders [his LinkedIn here] told us the ‘re-up’ rate for the vehicle was 75 percent and several investors from Funds III and IV were back for a third helping.
For much of the past decade, office square footage per worker has been on the decline, for reasons both practical – less paperwork meant fewer filing cabinets – and philosophical – extolling the virtues of creative collaboration. But that trend reached what Townsend partner Prashant Tewari calls its “natural limits” even before covid-19 drove worker density to near zero. In an interview with PERE [found here], Tewari says the ongoing effort to spread workers out will play a critical role in the recovery of the office sector, offsetting the many people who will shift to full-time remote work. Overall, his firm sees demand for office space falling between 9 and 12 percent in the years ahead. But still, Townsend is bullish on prime office investment both for its own funds and its advisory clients.
And the winners are…
The Global PERE Awards, always a highlight of the year, were especially insightful after a turbulent 12 months. The biggest winner – and not for the first time – is Blackstone. The most successful firm in the history of the awards took another 17 home this time around, including the highly coveted Global Firm of the Year award, leveraging its scale to execute market-setting transactions. Its $8 billion close on its fourth debt fund clinched it the titles of Capital Raise of the Year, as well as Debt Investor of the Year. And it saw the spinout of BioMed Realty into an open-end fund land it the honor of Deal of the Year.
Other stand-out winners include Jeff Hines, chairman and chief executive officer of Hines, who took the PERE Lifetime Achievement Award [our profile here]; the Singaporean logistics specialist GLP, which continued its reign over Asian categories; and the niche property types, which drove the North American and European award segments.
Rather than wholesale mergers and acquisitions, firms were more keen to buy and sell smaller pieces of platforms in 2020.
Room for more
Angelo Gordon is stocking up on European self-storage assets. The New York-based alternative investment manager has launched a new joint venture with London-based private investment firm MARCOL targeting the German self-storage sector. Space Plus will be led by European self-storage veteran Russell Jordan, formerly the chief executive of Self Storage Plus Germany and the CEO and founder of City Box Self Storage in the Netherlands. With a goal of investing €250 million in off-market opportunities across Germany, Space Plus plans to acquire and redevelop underperforming but well-located retail and commercial assets in the country. Angelo Gordon’s investment in Space Plus follows the acquisition of EasyBox Self Storage in Italy in 2018 and is part of the firm’s strategic initiative to increase its self-storage exposure in Europe.
An old hand at the helm
If you are a US real estate investment firm looking to chart the waters of European logistics you will need a local captain. Trammell Crow Company is the latest to think so and the latest to ask continental Europe logistics veteran Ian Worboys [his LinkedIn here] to do the job. He joined the Dallas-headquartered firm last week as head of European logistics, just over a decade since he did likewise for San Francisco-based TPG Capital. That business, P3 Logistics Parks, was sold to Singapore’s sovereign wealth fund GIC for a profitable €2.4 billion [our coverage of that transaction here]. Trammell Crow will be hoping his form continues.
Bouwinvest Real Estate Investors is furthering its footprint in affordable housing. The Dutch investor has teamed up with CBRE Global Investment Partners and Belgian real estate developer ION to invest €280 million in affordable new-build houses and apartments for rental purposes in Belgium. Bouwinvest and CBRE GIP are equal investment partners in the residential platform, which is being pegged as the first unlisted institutional housing platform in the country.
This week’s investor meetings
Wednesday, March 3
Thursday, March 4
- Teachers’ Retirement System of Louisiana
- South Carolina Retirement System
- San Bernardino County Employees’ Retirement Association (SBCERA)
Friday, March 5