REAL ESTATE - Shorenstein Properties LLC has raised $1.1bn (€867m) for its latest commingled (pooled) fund, Shorenstein Realty Investors Eight, L.P.
It took the real estate fund manager around four months to raise the capital. It could have made the fund larger if it wanted to. Douglas Shorenstein, Chairman of Shorenstein, said, “We think that this is the right amount of capital for our strategy in the current market. This allowed us to complete the process quickly and stay focused on investing rather than fund-raising.”
Shorenstein raised the capital from a variety of institutional investors. These were a mixture of pension funds, foundations, endowments and high net-worth individuals. One of the investors was the Yale University Endowment Fund.
Around 94% of the investor capital for Realty Investors Eight came from participants in Shorenstein’s previous funds. The real estate fund manager made a $100 million co-investment to the new commingled fund.
Shorenstein will be using 60% to 65% leverage on the new commingled fund. Investors in the fund should achieve a return in the neighborhood of a low to mid teens IRR. This yield assumes a holding period ranging from 18 months to 10 years.
The investment strategy for Realty Investors Eight is to focus on value-add office and mixed-use properties. The deals could be structured as straight acquisitions, joint ventures, preferred equity investments and mezzanine loans.