The fund will target office buildings, shopping malls and centers, condo conversions, hotels, apartment rentals and unfinished condos. Sky anticipates that the fund will acquire a portfolio in excess of $1 billion in commercial and residential properties with an exit strategy of one to four years. The timetable for sale of individual properties will vary depending on the property.

Toledano tells GlobeSt.com that a variety of investors from Europe and the US have contributed to the fund. "We believe it is the right time to focus on distressed investments given that credit markets are currently experiencing dislocation, and default rates are expected to rise," Toledano says.

Toledano adds that the fund will target areas that have been hit hard by the downturn in the housing market, such as Florida, California, Arizona and Georgia. Sky will target properties that will garner a 20% to 30% minimum return on investment. He anticipates that the fund will begin considering acquisitions within the next 90 days. "Banks are closing their faucets," he says. "There are a lot of sellers that have loans coming due that won't be able to pay them and be forced to sell properties."