Cerberus Raises $2.8B For Opportunistic Real Estate Fund

Lee Millstein, President of Cerberus Global Investments

Cerberus Capital Management raised approximately $ 2.8 billion for a new real estate fund, exceeding its target of $ 2 billion.

The fund known as Cerberus Institutional Real Estate Partners will focus on investing “opportunistically” according to a press release. This means looking at both direct assets and companies with significant real estate risk and debt, including bad or defaulted loans.

The company didn’t provide many details about how it will invest that money or what assets or debt opportunities it will target. However, the launch comes at a time when investors have not yet realized the far-reaching emergency situations predicted as a result of the pandemic. Apocalyptic forecasts about fire sales have not yet come true.

US private equity funds had to spend more than $ 250 billion on commercial real estate loans on March 23, according to Preqin. Of this, around $ 76 billion was earmarked for non-performing loans.

“There are market dislocations and macro trends that create compelling opportunities on our broad platform,” said Lee Millstein, President of Cerberus Global Investments and global director for real estate, in a statement.

Cerberus is a prolific investor in bad loans or loans that are in default. Since 1998, the company has invested approximately $ 21.3 billion in nearly 250 distressed loan transactions, according to its website.

The company is also banking on logistics and industrial investment, one of the hottest sectors in the industry during the pandemic. A subsidiary of Cerberus and the Stonemont Financial Group recently formed a joint venture to acquire industrial real estate valued at up to $ 1 billion.

A Cerberus company and Highgate recently acquired six hospitality portfolios from Colony Capital, according to a press release. Overall, the company’s real estate platform manages approximately $ 26 billion in assets.

Contact Keith Larsen