Brookfield understates to overachieve
When it emerged last week Brookfield Asset Management was seeking $15 billion from institutional investors for its fifth global opportunity fund, onlookers speculated the target – $2 billion lower than the capital collected for its predecessor – reflected perceived headwinds facing the firm given its exposure to the office sector. Not so, according to PERE sources familiar with the matter. They say the target set by the Toronto-based mega-manager for Brookfield Strategic Real Estate Partners V is in line with the firm’s characteristically understated approach to fundraising since the series began in 2013. Indeed, BSREP had an initial target of $3 billion but collected $4.5 billion; 2016’s BSREP II had a target of $7 billion but corralled $9 billion; the target for 2019’s BSREP III was $12 billion, but that attracted $15 billion and last year’s BSREP IV initially had a target of $15 billion before being increased to $17 billion. Further, given the close timing between BSREP IV and BSREP V, Brookfield determined it better to target the same and outraise that target, rather than set a higher target and miss it, PERE was told. One source added he thought Brookfield would rather come back to the market more quickly with the next vintage than feel pressure to put too much capital to work. Naturally, Brookfield declined to comment on the matter.

Rooms available
New York-based Blackstone’s sale of the JW Marriott San Antonio Hill Country Resort & Spa to Nashville, Tennessee-based public real estate investment trust Ryman Hospitality Properties is the second largest single-asset hotel deal since covid, after Brookfield sold the Diplomat Hotel in Hollywood, Florida in February. The deal for the Texas property was for $800 million, representing a $275 million profit for Blackstone over its five-year hold period, Nadeem Meghji, head of Blackstone Real Estate Americas, said in an announcement. Ryman liked the property because of San Antonio’s population and job growth, as well as limited competition in the market for a property like this, according to an investor presentation.

For Blackstone, this is also another notable exit from its non-listed BREIT vehicle since the firm first limited redemption requests seven months ago. The firm sold out of a 49.9 percent stake in two Las Vegas hotel and casinos for $1.27 billion around that time. Blackstone has continued to receive redemption requests. In May, requests totaled $4.4 billion, a 4 percent decrease month-on-month and 18 percent lower than January’s high of $5.3 billion. Whether this deal assuages any of those investors remains to be seen.

GIC eyes ESR Indian logistics portfolio
Singapore’s GIC is in talks to acquire an Indian logistics portfolio from its long-term partner, manager ESR. The sovereign wealth fund is one of the potential buyers for the 10 million square foot portfolio of warehouse space which is valued at around $400 million. GIC and ESR have been investing in India together since 2020, with the pair initially focused on development and value-add industrial opportunities across the country. Last year, they extended their relationship and formed a $600 million joint venture to acquire income-producing core industrial and logistics assets in India.

Madison’s institutional backing
New York-based Madison International Realty has received the backing of a sovereign wealth fund to formalize a part of its business focused on providing growth capital to real estate firms. The firm plans to deploy $1 billion in the next 12 months, investing in four to six middle-market real estate managers, Ron Dickerman, president and founder, told PERE. The firm has previously made these investments from its flagship secondaries fund, structuring them whereby it will execute a traditional secondaries trade and provide growth capital for future investments. The firm already has a pipeline of deals, including a single-family rental manager it will buy in the next 30 to 60 days. Check out our full coverage of the launch later this week.

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