Shorenstein closes office fund on $1.23bn

The San Francisco-based firm has officially closed its 10th vehicle exceeding its original target by roughly 20 percent.

Shorenstein Properties has closed its latest real estate opportunity fund garnering $1.23 billion of equity commitments from investors.

As first revealed by PERE in February, the San Francisco-based firm closed Shorenstein Realty Investors 10 over its original $1 billion target.

Shorenstein invested $75 million of GP co-invest in the vehicle, it said in a statement. Investors included domestic and foreign foundations, college endowments, pension funds and high-net-worth individuals. No placement agent was used, people familiar with the matter said.

The fund is expected to focus predominantly on office properties in major US markets, but Shorenstein chairman and chief executive officer said the fund could also look at development and equity and debt recapitalisations. It would also “entertain single asset as well as portfolio acquisitions”.

One of the latest LPs to back the fund was the University of Michigan, which revealed last week that it committed $10 million to the vehicle. The university’s board of regents has committed more than $100 million across five investments to Shorenstein’s real estate funds, it said in an investment update dated 17 February.

Shorenstein’s previous vehicle, Fund Nine, closed on $2.06 billion of commitments in 2007, and was just 40 percent invested when Shorenstein launched Fund 10, according to local media reports last March. Fund Nine’s investment period is set to expire this May, the report added. Fund Nine has acquired numerous office properties and a raft of mezzanine debt, including the mezzanine loan collateralised by equity interests in the owner of the two-building Santa Clara Towers in California. In March last year, Shorenstein assumed ownership of the offices when borrower Tishman Speyer handed back the keys after failing to restructure the buildings' debt.