Press Release

1st October 2013

Private Real Estate Fundraising Experiences Another Strong Quarter

In the last 6 months private real estate funds have raised an aggregate $39bn in investor capital, compared to $25bn in the same 6-month period last year.
The $18bn raised by private equity real estate funds holding final closes in Q3 represented a strong quarter for fundraising, with the aggregate capital raised by funds closed in Q2 and Q3 2013 reaching a combined $39bn, a healthy 56% increase on the $25bn raised in the same 6-month period last year. Furthermore, an aggregate $46bn has been raised by private real estate funds in 2013 so far, compared to $38bn raised in Q1 to Q3 2012. Q3 2013 Key Facts: Q3 2013 saw 31 funds reach a final close, raising an aggregate $18bn in capital commitments. The largest fund to close in Q3 2013 was Brookfield Strategic Real Estate Partners, which raised $4.4bn; Blackstone Real Estate Debt Strategies II was the second largest fund to close, raising a total of $3.5bn in investor capital. The average time taken for funds to reach a final close has decreased for the first time since 2010, from 19.8 months in 2012 to 18.5 months in 2013 so far. 81% of the capital raised in Q3 was by funds focusing on real estate in North America, at $14.9bn; comparatively, only $3.4bn was raised by funds focusing on Europe. As of the start of Q4, there are 448 closed-end private real estate funds in market, targeting an aggregate $159bn in capital commitments, a small decline on the $168bn which was targeted by 446 funds at the start of Q3 2013. For more information and analysis, please see the factsheet that follows.
Comment:

This latest quarterly fundraising data is encouraging news for the private real estate industry, demonstrating increasing momentum in the fundraising market and improving appetite among investors, particularly when combined with the last quarters strong data. Nonetheless, the large number of funds on the road means that the fundraising environment is likely to remain particularly competitive for many fund managers and attracting investor capital is still a very challenging prospect. Although the average length of time that funds spend in market has seen a slight decline fundraising is a long process for many firms, with private real estate funds still spending on average over a year and a half on the fundraising trail.
Andrew Moylan Head of Real Assets Products, Preqin _______________________________________________________________________________________________________ Note to Editors: Preqin is spelled without the letter U after the Q, the company name being an amalgamation of the former name, Private Equity Intelligence.

About Preqin: Preqin is the leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests. Preqin has built a reputation in the alternative assets industry for providing the most comprehensive and extensive information possible. Leading alternative assets professionals from around the world rely on Preqins services daily, and its data and statistics are regularly quoted by the financial press. For more information, please visit: www.preqin.com For more information, please contact: Andrew Moylan +44 (0)20 7397 9430 or amoylan@preqin.com For general press information, please contact: Helen Kenyon +44 (0)20 7645 8880 or press@preqin.com

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Q3 2013 Real Estate Fundraising

October 2013
Fig. 1: Quarterly Closed-End Private Real Estate Fundraising, Q1 2008 - Q3 2013
100 90 80 70 60 50 40 30 20 10 0 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 2008 2009 2010
Quarter

Fundraising by Region 81% of the capital raised in Q3 was by funds focusing on real estate in North America, at $14.9bn; comparatively, only $3.4bn was raised by funds focusing on Europe. Notable Funds Closing in Q3 2013 The largest fund to close in Q3 2013 was Brookeld Strategic Real Estate Partners, which raised $4.4bn; Blackstone Real Estate Debt Strategies II was the second largest fund to close, raising a total of $3.5bn in investor capital. Time Taken to Close Funds The average time taken for funds to reach a nal close has decreased from 19.8 months in 2012 to 18.5 months in 2013 so far. Funds in Market As of the start of Q4, there are 448 closed-end private real estate funds in market, targeting an aggregate $159bn in capital commitments, a small decline on the $168bn which was targeted by 446 funds at the start of Q3 2013
Preqin provides information, products and services to real estate firms, funds of funds, investors, placement agents, law firms, advisors and other professionals across the following areas: > Fund Performance > Fund Manager Profiles > Investor Profiles
19.8 18.5 17.0 15.6 15.0 11.5 10.0 9.2 13.9

Fig. 2: Closed-End Private Real Estate Fundraising in Q3 2013 by Fund Primary Geographic Focus
25

89 83 77 70 67 68 60 43 42 35 45 37 36 20 33 16 13 15 14 12 10 9 18 43 46 48 42 42 43 44 33 29 13 12 13 46 31 21 7 18 Aggregate Capital Raised ($bn) 69 No. of Funds Closed 20 14.9 No. of Funds Closed Aggregate Capital Raised ($bn) 3.4 3 0.2 North America Europe
Primary Geographic Focus

21

15

40

10 7 5

15 14

10

13

2011

2012

2013

Asia & Rest of World

Fig. 3: Closed-End Private Real Estate Funds in Market, Q1 2009 - Q4 2013

500 450 400 381 390 378376 350 300 250 200 150 100 50 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2011
Quarter

Fig. 4: Average Time Taken for Closed-End Private Real Estate Funds to Achieve a Final Close by Year of Fund Close
25.0

> Fundraising > Fund Terms and Conditions

363

383 378

403

Average Time Spent in Market (Months)

428 439 435434

450449 457

467

451

434 446448

20.0

For more information, or to arrange a demo, please visit: www.preqin.com/realestate New York: One Grand Central Place, 60 E 42nd Street, Suite 630, New York NY 10165 | Tel: +1 212 350 0100 London: Equitable House, 47 King William Street, London EC4R 9AF | Tel: +44 (0)20 7645 8888 Singapore: One Finlayson Green, #11-02, Singapore, 049246 | Tel: +65 6305 2200 San Francisco: 580 California Street, Suite 1638, San Francisco, CA 94104 | Tel: +1 415 635 3580
alternative assets. intelligent data.

No. of Funds Raising 228227 199 173 178 147 134132 138 160 138 148 165166 162 168 148 156 168 159 Aggregate Target Capital ($bn)

5.0

0.0 2007 2008 2009 2010

Year of Final Close

2011

2012

2012

2013

Jan-Sep 2013

Fig. 5: 10 Largest Closed-End Private Real Estate Funds to Hold a Final Close in Q3 2013
Fund Brookeld Strategic Real Estate Partners Blackstone Real Estate Debt Strategies II Perella Weinberg Real Estate Fund II KTR Industrial Fund III Crow Holdings Realty Partners VI Merlone Geier Partners Fund XI Harrison Street Real Estate Partners IV AllianceBernstein Commercial Real Estate Debt Fund GTIS US Residential Strategies Encore Housing Opportunity Fund II Firm Brookeld Asset Management Blackstone Group Perella Weinberg Partners KTR Capital Partners Crow Holdings Capital Partners Merlone Geier Partners Harrison Street Real Estate Capital AllianceBernstein GTIS Partners Encore Housing Opportunity Fund Strategy Opportunistic Debt Opportunistic Value Added Core-Plus, Opportunistic, Value Added Value Added Opportunistic Debt Debt, Distressed, Opportunistic Distressed, Opportunistic Size (mn) 4,400 USD 3,500 USD 1,300 EUR 1,200 USD 1,067 USD 900 USD 750 USD 700 USD 526 USD 460 USD

Geographic Focus Global North America, Europe Europe North America US US US US US US