Largest firms favoured office deals over past five years

Office properties were the most sought after asset for the world’s largest private equity real estate firms over the past five years, according to a new book due to be published by PERE, entitled the Largest Private Equity Real Estate Firms in the World.

More than 45 percent of all acquisitions conducted by the 30 largest private equity real estate firms between January 2003 and mid-April 2008 focused on the office sector, compared to 20.9 percent for hotels and 16.9 percent for apartments.

The book, which uses data from Real Capital Analytics, follows on from PERE’s ranking of the top 30 industry firms according to capital raised in the five year period to April this year.

The PERE 30 found that The Blackstone Group raised $19.75 billion in value-add and opportunistic real estate funds during the five-year period, against Morgan Stanley Real Estate’s $16.77 billion. They were followed by Tishman Speyer, Goldman Sachs’ Real Estate Principal Investment Area (REPIA) and Colony Capital.

In total, PERE 30 firms raised more than $190 billion – the top eight firms accounting for almost half of that raising $98.57 billion during the same period. The capital raised by the remaining 22 PERE 30 firms totaled 92.01 billion. The average amount of capital raised over the five-year timeframe was $6.35 billion.

The most active participants in the real estate market globally – for the buying and selling of all property types – were Blackstone, Morgan Stanley, Tishman Speyer, Lehman Brothers Real Estate and Goldman Sachs REPIA.

Offices made up 45.7 percent of all acquisition and 58.1 percent of all sales worldwide during 2003 and 2008, with more than $377 billion of office assets bought and sold. Blackstone was the most active buyer and seller of office properties buying more than 159 million square feet of office space totaling $45 billion. Blackstone was also the biggest buyer of hotels purchasing more than 1,000 properties during the five-year period for $43.5 billion.

Tishman was the largest PERE 30 purchaser of apartments, according to the PERE 30 book, buying $27.6 billion of assets totalling 87.6 million square feet. The biggest buyer of retail and development sites was MGPA, which bought around $9.6 billion and $3 billion worth of assets respectively. ProLogis was the biggest acquirer of industrial assets and bought $8.8 billion of assets covering more than 91 million square feet.

For more information on the PERE 30 book, click here.