Zoe Hughes
Reporting first quarter earnings, the New York-based firm said it wrote-down its private equity investments by an average of 3%. President Tony James said the firm was concentrating on debt opportunities.
The New York-based private equity real estate firms are once again the two largest private equity real estate firms in the world. The top 30 firms raised more than $211 billion in value-added, opportunistic capital over the past five years.
The San Francisco-based firm has closed its eighth private equity real estate fund, targeting all property sectors in the US.
Otera Capital Corp, part of Canadian pension fund Caisse de depot et placement du Quebec, has reportedly bought part of the 1330 Avenue of the Americas building after the property developer defaulted on a $130 million mezzanine loan.
The Canadian pension's private equity platform had a negative 32% return last year, which it blamed in part on two Lone Star funds. It also took large hits on its real estate and infrastructure investments.
The level of distress in the global real estate market has risen by more than half since the end of 2008. In the first quarter of 2009, defaults on commercial mortgages and failed property companies were more than $55bn.
The bank may sell offices in New York, Paris and London, and possibly lease them back, after receiving interest from investors. This would be the second time in two years the bank has sold its landmark London HQ. In December, it bought back the property from Metrovacesa at a 25% discount after selling it to the Spanish group in 2007 for a record £1.1bn.
The Los Angeles-based private equity real estate firm has stopped negotiations for a possible investment in MGM’s struggling casino development, City Center. Also, Colony chairman Tom Barrack says the real estate market is in the 'tank' and predicts the best opportunities will be in the banking sector.
The US investment fund has reportedly outbid Goldman Sachs and Oaktree Capital Management for the chance to rescue Japanese real estate investment trust, New City Residence Investment Corp.
Chris Macke, former GE Real Estate vice president, has set up his own firm, General Equity Real Estate, to target single-tenant commercial properties. He will be joined by other GE Real Estate net lease professionals in the near future.