Wednesday, April 20, 2011

Private Equity Real Estate
Bloomberg has a long, informative article on private equity real estate investment.  The article states that 439 private equity funds are looking for $160 billion in commitments.  That is a significant sum of capital.  The capital behind some of these private equity firms is staggering.  Firms like Blackstone have to make huge investments, like the $9.4 billion it paid to acquire Australia's Centro Properties' US mall portfolio earlier this year, and can't spend the time on individual properties.  The $9.4 billion in one transaction is more then four to six times what the typical non-traded REIT will raise in equity over two years.  (The article did not give specifics on the equity Blackstone used to acquire the Centro portfolio (I doubt it was $9.4 billion), but still, the comparative scale to non-traded REITs is impressive.)

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