GLOBAL - Rothschild Realty Managers has made its first-ever investment in the New York office market with a $150m (€116m) investment in RXR Realty.
Matthew Kaplan, a managing partner at Rothschild Realty, said RXR was "best positioned" to take advantage of investment opportunities in Manhattan and the surrounding New York Tri-State area.
He said: "The company has demonstrated its value-creation capabilities over numerous business and real estate cycles to deliver superior returns to its investors."
RXR will use the capital from Rothschild to grow its business in the office markets it operates in the New York area.
RXR owns interests in or manages 102 properties in the region, totaling 12.9m square feet.
Rothschild Realty made the $150m investment from its commingled fund, Five Arrows Realty Securities V.
The investment was divided up, with $120m coming directly from the commingled fund and the other $30m from a co-investment from investors in the commingled fund.
This becomes an option when investments of $100m or more are made for the commingled fund.
One of the investors with the option for a co-investment is Teacher Retirement System of Texas.
It had made an investment of $75m for co-investments and $150m directly into the commingled fund.
Rothschild Realty is expecting to achieve a mid-teens, leveraged internal rate of return on the investment with RXR.
Part of the transaction also calls for Rothschild to have its personnel make up 50% of the board of directors for RXR.
Rothschild Realty said it was looking for additional investments for Five Arrows V.
The fund makes investments that are used for private placement growth capital to public and private real estate companies.
The company raised $840m of equity for the commingled fund in July of 2008.