There was an upturn in private equity real estate fundraising in Q2 2011, with 20 funds reaching a final close raising an aggregate $11.9 billion.
The largest of these was the $5.5 billion Lone Star Real Estate Fund II, which targets investments in a broad range of financial and other investment assets in commercial real estate worldwide. Och-Ziff Real Estate Advisors raised $840 million for Och-Ziff Real Estate Fund II which focuses on US markets, specifically in Arizona, California, Florida, Nevada, New Jersey and Texas. It targets distressed land with a view to having it entitled before selling it to single-family homebuilders and provides mezzanine loans or preferred equity. Elsewhere in the US, Harrison Street Real Estate Capital raised $596 million for Harrison Street Real Estate Partners III, which targets niche real estate sectors such as off-campus student housing, senior housing, medical offices and storage properties.
Two Europe-focused debt funds reached a final close in the quarter: Pramerica Real Estate Investors raising £492 million for Pramerica Real Estate Capital I, which focuses on originating and structuring secured mezzanine in the European real estate market. M&G Real Estate Debt Fund, managed by M&G Investments, targets Western European commercial real estate debt, focusing on the UK, Germany, Netherlands and France.
In the Asia and Rest of the World region, São Paulo-headquartered Prosperitas Investimentos closed Prosperitas Real Estate Partners III with commitments of $750 million. The value added and opportunistic fund invests in industrial and residential properties throughout Brazil.