Los Angeles
CBRE Global Investors Exceeds Capital-Raising Target with Final Close of Fifth U.S. Development Fund
22 Jul 2019
CBRE Global Investors today announced the final closing for CBRE U.S. Development Partners 5, a development club fund with equity commitments of $616 million to the fund and its co-investment vehicles, exceeding its capital-raising target.
Development 5, which is closed to new investors, is a continuation and evolution of a fund series sponsored by CBRE Global Investors focused on development investing in the United States. The fund is capitalizing on a programmatic relationship with leading U.S. developer Trammell Crow Company to invest in the development of a diversified portfolio of institutional-quality real estate assets designed for the “New Economy.”
In particular, the fund’s research-driven, “cycle-aware” approach is focused on investing in state-of-the-art distribution and “last mile” fulfillment centers; high-quality multifamily rental communities with superior access to transportation and lifestyle amenities; and state-of-the-art healthcare, commercial and mixed-use properties that provide collaborative, flexible and highly amenitized workspace, all in markets with strong population and job growth.
“Demographic trends and technological advances are creating structural changes in how commercial real estate is used,” said Robert Jue, Portfolio Manager, CBRE Global Investors. “We believe investments in properties that meet the needs of the ‘New Economy’ will outperform through cycles and are pleased to have this opportunity to partner with Trammell Crow Company.”
The club fund’s investors are all repeat investors from the previous funds in the series. With total projected development costs of $1.3 billion, including leverage, the fund has already invested more than 90 percent of its equity in 10 properties in Dallas, Denver, Phoenix, Portland, San Jose and Washington, D.C.
The first three funds in the series are fully liquidated and produced an average 20 percent internal rate of return and a 1.7x equity multiple, net to investor clients1.
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About CBRE Global Investors
CBRE Global Investors is a global real asset investment management firm with $107.2 billion in assets under management* as of March 31, 2019. The firm sponsors investment programs across the risk/return spectrum for investors worldwide.
CBRE Global Investors is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE). It harnesses the research, investment sourcing and other resources of the world’s largest commercial real estate services and investment firm (based on 2018 revenue) for the benefit of its investors. CBRE Group, Inc. has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. For more information about CBRE Global Investors, please visit www.cbreglobalinvestors.com.
*Assets under management (AUM) refers to the fair market value of real asset-related investments with respect to which CBRE Global Investors provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real asset-related loans. This AUM is intended principally to reflect the extent of CBRE Global Investors’ presence in the global real asset market, and its calculation of AUM may differ from the calculations of other asset managers.
1. The track record shown reflects investments made by certain funds advised by CBRE Global Investors in conjunction with multifamily developer Wood Partners. For CBRE U.S. Development Partners 5 (the “Fund”), CBRE Global Investors is partnering with Trammell Crow Company (“TCC”), a subsidiary of CBRE. TCC was not involved in the investments made by the prior funds described above, and Wood Partners will not be involved in investments made for the Fund. In addition, the “Wood” series track record reflects a 100 percent allocation to multifamily investments, while the Fund is expected to allocate a portion to industrial, a portion to multifamily, and a portion to other investments. As a result of the foregoing, there can be no assurance that future development funds sponsored by CBRE Global Investors will have the characteristics or returns of the funds included in the “Wood” series track record. Past performance is not an indication of future results. Returns are as of Dec. 31, 2018, are unaudited, and subject to change. Net, leveraged equity multiple is calculated after fund-level expenses, fees, reserves and carried interest.
The average IRR and equity multiple, as applicable, are weighted averages of the IRR or equity multiple, as applicable, of each of the three funds included in this performance, weighted in accordance with the relative assets under management attributable to each fund. This is not a calculation taking into account the cash flows of all investments in each fund as if all investments were part of a single fund, and the investments of the funds included in this performance were not made in the context of a single fund or account with coordinated objectives, guidelines or restrictions. Accordingly, the aggregate performance is hypothetical and does not reflect the actual return of any CBRE Global Investors client or investor. Other methods of calculating the aggregate performance could lead to different results, which may be lower or higher than the performance shown above.
Development 5, which is closed to new investors, is a continuation and evolution of a fund series sponsored by CBRE Global Investors focused on development investing in the United States. The fund is capitalizing on a programmatic relationship with leading U.S. developer Trammell Crow Company to invest in the development of a diversified portfolio of institutional-quality real estate assets designed for the “New Economy.”
In particular, the fund’s research-driven, “cycle-aware” approach is focused on investing in state-of-the-art distribution and “last mile” fulfillment centers; high-quality multifamily rental communities with superior access to transportation and lifestyle amenities; and state-of-the-art healthcare, commercial and mixed-use properties that provide collaborative, flexible and highly amenitized workspace, all in markets with strong population and job growth.
“Demographic trends and technological advances are creating structural changes in how commercial real estate is used,” said Robert Jue, Portfolio Manager, CBRE Global Investors. “We believe investments in properties that meet the needs of the ‘New Economy’ will outperform through cycles and are pleased to have this opportunity to partner with Trammell Crow Company.”
The club fund’s investors are all repeat investors from the previous funds in the series. With total projected development costs of $1.3 billion, including leverage, the fund has already invested more than 90 percent of its equity in 10 properties in Dallas, Denver, Phoenix, Portland, San Jose and Washington, D.C.
The first three funds in the series are fully liquidated and produced an average 20 percent internal rate of return and a 1.7x equity multiple, net to investor clients1.
###
About CBRE Global Investors
CBRE Global Investors is a global real asset investment management firm with $107.2 billion in assets under management* as of March 31, 2019. The firm sponsors investment programs across the risk/return spectrum for investors worldwide.
CBRE Global Investors is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE). It harnesses the research, investment sourcing and other resources of the world’s largest commercial real estate services and investment firm (based on 2018 revenue) for the benefit of its investors. CBRE Group, Inc. has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. For more information about CBRE Global Investors, please visit www.cbreglobalinvestors.com.
*Assets under management (AUM) refers to the fair market value of real asset-related investments with respect to which CBRE Global Investors provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real asset-related loans. This AUM is intended principally to reflect the extent of CBRE Global Investors’ presence in the global real asset market, and its calculation of AUM may differ from the calculations of other asset managers.
1. The track record shown reflects investments made by certain funds advised by CBRE Global Investors in conjunction with multifamily developer Wood Partners. For CBRE U.S. Development Partners 5 (the “Fund”), CBRE Global Investors is partnering with Trammell Crow Company (“TCC”), a subsidiary of CBRE. TCC was not involved in the investments made by the prior funds described above, and Wood Partners will not be involved in investments made for the Fund. In addition, the “Wood” series track record reflects a 100 percent allocation to multifamily investments, while the Fund is expected to allocate a portion to industrial, a portion to multifamily, and a portion to other investments. As a result of the foregoing, there can be no assurance that future development funds sponsored by CBRE Global Investors will have the characteristics or returns of the funds included in the “Wood” series track record. Past performance is not an indication of future results. Returns are as of Dec. 31, 2018, are unaudited, and subject to change. Net, leveraged equity multiple is calculated after fund-level expenses, fees, reserves and carried interest.
The average IRR and equity multiple, as applicable, are weighted averages of the IRR or equity multiple, as applicable, of each of the three funds included in this performance, weighted in accordance with the relative assets under management attributable to each fund. This is not a calculation taking into account the cash flows of all investments in each fund as if all investments were part of a single fund, and the investments of the funds included in this performance were not made in the context of a single fund or account with coordinated objectives, guidelines or restrictions. Accordingly, the aggregate performance is hypothetical and does not reflect the actual return of any CBRE Global Investors client or investor. Other methods of calculating the aggregate performance could lead to different results, which may be lower or higher than the performance shown above.