Brookfield Asset Management, Inc. recently announced plans to set up its own private real estate investment fund (REIT) after it takes over the management of the real estate portfolio currently controlled by Oaktree Capital Management’s subsidiary, Bloomberg. reports…
The Alternative Asset Manager is taking this step to scale up the company and strengthen Brookfield’s reputation as owner and operator of CRE, according to people familiar with the situation. The company would like to see its portfolio grow over time and eventually compete with rival REITs operated by companies such as Blackstone Group and Starwood Capital Group.
Brookfield’s new company, Brookfield Real Estate Income Trust, Inc., will be formed by transferring the consultant role to Oaktree Real Estate Income Trust Inc. in Brookfield, Bloomberg reports. Oaktree REIT currently has total assets of $ 478 million, which include residential properties in Atlanta, Denver and Dallas, as well as CRE office buildings in Arlington, Virginia, and Los Angeles. Since its inception in December 2019, the fund has returned 10.3%.
“Oaktree has done an excellent job generating significant shareholder returns,” Brookfield managing partner Zach Vaughan said in a statement announcing the deal, which was first published by Bloomberg News. “This transition benefits shareholders going forward by combining Brookfield’s supplier networks, operational capabilities and a global presence, while maintaining the benefits of Oaktree’s lending excellence.”
Brookfield will contribute its stake in three apartment and office properties to a new REIT, which sources say is valued at more than $ 400 million. The strategy will largely remain the same, but it could now include non-US markets that Brookfield operates in, Bloomberg reported. The shift is expected to take place in the fourth quarter. Brookfield-Oaktree Wealth Solutions will distribute the new REIT divisions to individual and high net worth investors. In addition, Brookfield Asset is seeking a separate deal with New York-based Brookfield Property Partners LP, Bloomberg reported.
KKR and Blackstone complete REIT deals
Bloomberg reports that Brookfield isn’t the only real estate firm making strides in the REIT space. In May, KKR & Co. announced the creation of KKR Real Estate Select Trust Inc. with a net worth of $ 150 million, and the total assets of Starwood’s private REIT is approximately $ 7.8 billion. Meanwhile, the total assets of Blackstone REIT, the Blackstone Real Estate Income Trust, stood at $ 48.4 billion at the end of May. The company recently announced it had entered into an agreement to acquire a stake in American International Group, Inc. in the portfolio of affordable housing for approximately $ 5.1 billion.
Joe Dayton can be reached at firstname.lastname@example.org.