Office-Focused Real Estate Fundraising – 2006 to August 2012

by Luke Alexander

  • 31 Aug 2012
  • RE

Currently, 35 office-focused funds are on the road with an aggregate target of $12.6bn, according to Preqin’s latest data. From 2006 to August 2012, office-focused funds raised an aggregate $30.2bn and in the last 10 years they raised an aggregate $42.1bn.

From 2006 to August 2012, the number and aggregate capital raised by office-focused funds saw an overall downward trend. In 2006, 15 funds raised an aggregate $7.8bn. 2007 saw more capital raised from fewer funds; $8.8bn was raised from 14 office-focused funds, one less than 2006. The number of funds fell to 12 in 2008 and the aggregate capital raised fell to $4.1bn. In 2009 the number of closed funds fell further to only six, which raised an aggregate total of $1.6bn. 2010 saw some recovery when 12 funds raised an aggregate $5.3bn. However, in 2011 the number of funds raised dropped again to eight, which raised an aggregate $2.2bn. From January to August 2012 only three funds raised an aggregate $0.7bn, highlighting a further fall in momentum compared with 2011.

Of the 35 funds currently on the road, there is a strong geographic preference for North America and Europe-focused funds. Thirteen funds targeting $5.4bn are North America-focused, while the same number of funds targeting $4.4bn are focused on Europe. Nine funds targeting $2.7bn are focused on Asia and Rest of World.

The largest office-focused fund currently in market, Paramount Group Real Estate Fund VII, is managed by Paramount Group and is targeting $1bn. The fund is focused on large metropolitan areas including New York, San Francisco, and Washington D.C. The fund adopts a core-plus strategy focusing on Class-A office real estate.

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