Lone Star Raises $2.7B in Latest Funding Round for CRE Investments

Lone Star Funds has raised roughly $2.7 billion in its latest round of funding that will help support potential commercial real estate investments.

Through Lone Star Real Estate Fund VII, the private equity firm said in a statement that it will aim for “value-add” opportunities in the industry. This includes investments in debt portfolios, operating companies, and direct CRE equity.

Donald Quintin, CEO of the company, said it will target not only North America but Europe and Japan regions as well.

“Lone Star has been investing in the broader commercial real estate sector for nearly 30 years, and we believe that the current environment is likely to play to our strengths as a disciplined and flexible opportunistic investor,” he said.

“We greatly appreciate the continued support of our longstanding partners who have supported us again during our most recent fundraise.”

It’s unclear what asset classes Lone Star plans on investing in and firms it raised the capital from but it currently has holdings in multiple segments including single-family, residential real estate, consumer debt, and securitized products.

Before the recent announcement, the global firm’s latest fundraising came from Lone Star Fund XII, L.P., which closed with capital commitments of roughly $5.3 billion in June. Moreover, Lone Star’s previous real estate-related funding round fetched about $4.6 billion in 2019.

Last month, a subsidiary of Lone Star purchased a commercial and residential fire business from Florida-based Carrier Global Corp. for $3 billion.

Since 1995, Lone Star has raised approximately $95 billion collectively through 25 funds.

But now, as the Federal Reserve is expected to begin cutting rates after its meeting next week, there could be a big opportunity to capitalize on investments in the near future for Lone Star.