Deutsche Asset & Wealth Management (AWM) has added four new professionals to its US real estate team amid a renewed investment initiative in the country.
The new hires, all of which joined in the past two months, include Matthew Jaffe, a New York-based director and alternative investment specialist in the global client group, concentrating on real estate; and Peter Mette, a San Francisco-based director in the real estate transactions team focusing on investments in southern California. The other recruits included Cheryl Charnas, a residential asset manager in the real estate asset management team in Chicago, and Emily Zagorski, a vice president of product development in real estate in New York.
“Business in the Americas has been in growth mode since the beginning of the year,” said Pierre Cherki, head of alternatives and real assets at Deutsche AWM, which includes the firm's real estate investment business (formerly RREEF). This is in contrast to 2012, when the real estate investment business was “mainly focused on maintenance,” amid the uncertainty surrounding its fate in the wake of Deutsche Bank’s strategic review of RREEF. Going forward, the firm plans to selectively make additional hires in growth areas of its real estate investment platform.
Deutsche AWM currently in the process of developing new real estate investment vehicles focused on the US and consequently needs to boost its capital-raising and product development capabilities. Although about 80 percent to 90 percent of Deutsche AWM’s US real estate business is in core strategies, it also is working on a number of non-core offerings, including a new real estate mezzanine debt fund, that are expected to hit the market beginning next year.
“We have seen inflows certainly increase during the year,” said Cherki. The majority of the inflows have come from the US, predominantly institutional investors, as well as a smaller percentage of high-net-worth individuals. He expects the bulk of the capital to be directed into Deutsche AWM’s main core real estate products, which include open-ended funds RREEF America REIT II and RREEF Property Trust, as well as core separate accounts.
The firm has struck a number of real estate deals in the US over the past year. Most recently, Deutsche AWM closed on a development project in Vernon Hills, Illinois, in a joint venture with REVA Development Partners and Hamilton Partners. The project, which will be executed on behalf of an institutional investor, will construct and lease 304 multifamily units on a 29.5-acre site. Additionally, it purchased three retail and office properties on the West Coast for $266 million and a leased fee interest in The Milford Hotel in New York earlier this year.
As of June 30, Deutsche AWM’s real estate investment business comprised more than 450 employees located in 21 cities worldwide and €36.7 billion ($49.6 billion) in assets under management.