The Related Companies is raising its first commingled private equity real estate fund to target distressed loans and assets across all asset classes in the US.
The New York-based developer is targeting $750 million for the Related Distressed Opportunity Fund I and already has secured $250 million in commitments, according to people familiar with the matter. As of the end of January, the fund had corralled $170 million in commitments and had a hard cap of $1.25 billion, according to Securities and Exchange Commission filings.
Related also is raising a multifamily fund and managing a construction loan account on behalf of an institutional investor, which, when combined with the distressed opportunity vehicle, are raising a total of almost $1.5 billion in equity, sources said. A Related spokeswoman declined to comment.
Related’s January acquisition of the foreclosed New York condo at 225 Rector Place for $82.8 million is believed to be part of the distressed opportunity fund.
Related is the latest in a line of operators and non-traditional real estate investors turning to the fund market to raise equity as they look to take advantage of the dislocation in US real estate markets.
The office and retail REIT, Vornado Realty Trust, launched its debut commingled fund in July 2009, with a final close expected in the coming weeks. The vehicle, Vornado Capital Partners, held a first close on $550 million last July and is expected to hit close to its $1 billion target soon, according to other people familiar with the matter.
Fundraising for private equity real estate vehicles has gotten off to a flying start in 2011 compared to the past two years, with The Blackstone Group revealing earlier this month it also would return to market this year for Blackstone Real Estate Partners VII, which will target around $10 billion in equity.