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Jun 30, 2009
By: Barbra Murray, Contributing Editor
As is the case in the U.S., the commercial real estate market in Europe is in flux, but when those price tags begin to drop, as is widely expected, the Blackstone Group will be perfectly prepared to pounce on those golden opportunities. The investment company has just completed the final closing of Blackstone Real Estate Partners Europe III, with a total of approximately $4.3 billion in equity capital commitments.
Despite the global economic crisis, BREP Europe III's multi-billion-dollar purse indicates that there are more than a few investors with tidy sums of money in their pockets, ready to become players in the impending recapitalization of the real estate market across Europe. The fund was originally expected to raise $3.5 billion, but ultimately overshot its goal by a significant number, thanks to what Blackstone describes as a diversified group of limited partners from around the world.
Fund contributors from the United States include Teacher Retirement System of Texas, which committed about $250 million, and Pennsylvania Public School Employees' Retirement System, or PSERS. According to a PSERS investment document, BREP Europe III will focus its activities on the hospitality, healthcare and student housing sectors, making investments ranging in size from $15 million to $150 million. "Given the current volatility in the capital markets, there should be significant opportunities to make distressed debt and equity investments in under-managed operational assets, and those assets controlled by non-core owners," PSERS notes in the document. The pension fund reportedly threw in approximately $200 million.
While BREP Europe III is more than equipped to spend wildly at the drop of a hat, it probably won't. Timing is everything. "Given the continued deterioration in the global economy and the lagging nature of the real estate market, we will remain disciplined and cautious in deploying this capital over the coming years," Chad Pike, senior managing director and co-head of Blackstone Real Estate, noted in a prepared statement.
Other groups are positioning themselves to get in on the ground floor of distressed investments in Europe. Earlier this month, U.K.-based Henderson Global Investors launched the Henderson Central London Office Fund II with plans of raising an initial $330 million to invest in office assets in London, as prices dwindle. And in March, Chicago-headquartered real estate investment management firm Heitman L.L.C. completed the first closing of Heitman European Property Partners IV with $486 million in hand and leveraged buying power totaling nearly $950 million for the acquisition of commercial real estate and debt.
By: Barbra Murray, Contributing Editor
As is the case in the U.S., the commercial real estate market in Europe is in flux, but when those price tags begin to drop, as is widely expected, the Blackstone Group will be perfectly prepared to pounce on those golden opportunities. The investment company has just completed the final closing of Blackstone Real Estate Partners Europe III, with a total of approximately $4.3 billion in equity capital commitments.
Despite the global economic crisis, BREP Europe III's multi-billion-dollar purse indicates that there are more than a few investors with tidy sums of money in their pockets, ready to become players in the impending recapitalization of the real estate market across Europe. The fund was originally expected to raise $3.5 billion, but ultimately overshot its goal by a significant number, thanks to what Blackstone describes as a diversified group of limited partners from around the world.
Fund contributors from the United States include Teacher Retirement System of Texas, which committed about $250 million, and Pennsylvania Public School Employees' Retirement System, or PSERS. According to a PSERS investment document, BREP Europe III will focus its activities on the hospitality, healthcare and student housing sectors, making investments ranging in size from $15 million to $150 million. "Given the current volatility in the capital markets, there should be significant opportunities to make distressed debt and equity investments in under-managed operational assets, and those assets controlled by non-core owners," PSERS notes in the document. The pension fund reportedly threw in approximately $200 million.
While BREP Europe III is more than equipped to spend wildly at the drop of a hat, it probably won't. Timing is everything. "Given the continued deterioration in the global economy and the lagging nature of the real estate market, we will remain disciplined and cautious in deploying this capital over the coming years," Chad Pike, senior managing director and co-head of Blackstone Real Estate, noted in a prepared statement.
Other groups are positioning themselves to get in on the ground floor of distressed investments in Europe. Earlier this month, U.K.-based Henderson Global Investors launched the Henderson Central London Office Fund II with plans of raising an initial $330 million to invest in office assets in London, as prices dwindle. And in March, Chicago-headquartered real estate investment management firm Heitman L.L.C. completed the first closing of Heitman European Property Partners IV with $486 million in hand and leveraged buying power totaling nearly $950 million for the acquisition of commercial real estate and debt.
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