Blueprint: PERE America Forum lands in New York, Starwood’s Fund XIII launch, Proptech 20 ranking unveiled

Falling back to earth

Has the property technology capital market overextended? That was a perspective to come out of PERE’s analysis of the annual Proptech 20 ranking of capital raisers for discretionary funds focused on the segment. The ranking modestly ticked up in aggregate year-on-year to $11.28 billion, roughly 13 percent more than last year’s total. That bump was paltry compared with the 80 percent growth rate between the 2021 edition of the ranking and last year’s iteration. Top managers in the proptech space remain confident they can attract and deploy capital in the sector. But without the benefit of cheap, abundant funding, venture firms and the companies they invest in are under enhanced pressure to deliver results to investors. “The 2021-22 phenomenon was money moving into the space at a faster than absorbable pace,” Travis Connors, co-founder and general partner of Boston-based Building Ventures, told us. “We see a steady increase in opportunities, but there is a mismatch in understanding of how fast these things can scale and what the capital deployment into the companies needs to be.”

No place like new homes

Housing developers in the UK are increasingly finding a welcome buyer in private equity capital. In the latest sign of the institutionalization of the single-family rental sector in the country, mega-manager Blackstone has purchased 2,900 yet-to-be-built homes for £819 million ($1 billion; €939 million) in its largest deal in the space to date. The developer, Vistry Group, has signed an agreement with private rental housing provider Leaf Living and affordable housing provider Sage Homes, which are both backed by Blackstone-managed funds and real estate firm Regis Group.

Indeed, build-to-rent is flavor of the month in UK investment circles. According to broker Savills, investment in the sector in the year to Q3 represented 10 percent of total real estate investment – the highest proportion on record. In another SFR deal announced last week, London-based Matter Real Estate received a £105 million commitment from UBS Asset Management’s real estate arm to anchor its new core residential fund. The capital has already been deployed in a stabilized portfolio of 560 newly built homes developed by Matter portfolio company Placefirst. Read more in PERE’s coverage here.

A new kind of buyback

Real estate private equity investors familiar with the San Francisco market are moving forward with the acquisition of office properties there, a trend which could mark the turning of the tide for a sector in a market that has fallen into hard times as a result of the covid-19 pandemic. Rubicon Point Partners, a local private equity firm, earlier this month struck a deal to acquire 123 Townsend Street from CBRE Investment Management. The firm paid about $73 million for the six-story, brick-and-beam office building, with Ani Vartanian, co-managing partner, noting the acquisition demonstrates Rubicon Point’s commitment to the city and belief in the long-term prospects of this asset. Rubicon Point is not alone – Hong Kong-based Gaw Capital Partners and Irvine, California-based LBA Realty are each diving into the city, buying back office properties they separately sold to Blackstone earlier in the cycle.

Data snapshot