Brookfield is trying to raise $15 billion for a new real estate fund that will invest in value deals expected from the ongoing shakeout of troubled real estate, according to a report in Bloomberg. It is halfway there after a year of fundraising with $7 billion, including its own capital.
While there are many firms raising capital to take advantage of these opportunities, targeting undervalued assets has long been a favorite strategy of CEO Bruce Flatt, who has wagered billions that such properties appreciate over time.
Sometimes he was wrong, as Bloomberg pointed out: Brookfield has defaulted on more than $3 billion of US commercial mortgages and handed the keys back from two Los Angeles office towers and Manhattan’s Brill Building. Also, S&P Global Ratings has cut subsidiary Brookfield Property Partners’ credit rating to junk status as the company has $2.7 billion of loans maturing through 2025.
Brookfield also plans to cut its real estate holdings from roughly $24 billion in properties to $15 billion by 2028.
An initial closing for the fund was expected for this past July but fundraising has been slower than anticipated. Bloomberg reports that some of the European investors still waiting on more capital to be repaid from previous funds are rethinking committing money to the latest vehicle.