Michael Katz, Co-CEO of the Sterling American Funds, tells GlobeSt.com that the company began raising capital for SAP V in April 2006. Sterling was looking for between $400 million to $450 million for SAP V, with the plan to contribute $200 million of the firm's capital to the fund. The first closing was more than $400 million and Katz says the firm opted to raise it to $600 million. SAP V closed Monday and will be fully invested in three to four years.

"About 75% of our existing investors re-upped," Katz says. Of the SAP V investors, 40% are high net worth individuals, and 60% are institutions, which includes endowments, charities, banks as well as public and private pension funds.

Sterling focuses mostly on office and multifamily properties that offer value-added opportunities and which it can hold for the long-term. Katz says the company has dealt mostly in office over the last several years as the condo craze began to negatively impact the multi-housing market. Sterling closed on its first residential complex a couple months ago after almost three years.

Sterling properties are located primarily in San Francisco, Atlanta, Tennessee and Florida. Recently, Sterling bought a 900,000-sf building in Philadelphia and the 700,000-sf 200 West Adams building in Chicago. Katz says he would like to enter 24-7 areas of the city, but realizes that is many times not possible.

And although Sterling is New York based, it does not own any properties in Manhattan. "We are New Yorkers and we'd love to be here, but we feel uncomfortable buying for today's prices." As an example, Katz says, "The last office building we owned in New York City was 575 Fifth Ave. and we sold it about two years ago at $750 a sf, which was one of the highest prices at that time, which was a 30% increase over the prior year's value."