Jumping on the Bandwagon, LaSalle Forms Partnership to Capitalize on Discounted Real Estate

As expected, price tags on commercial real estate around the world are dropping and LaSalle Investment Management is among the minority presently in a position to take advantage of bargains, the likes of which may not be seen again in decades. The Chicago-based firm has just formed a fund with the Austin-headquartered

Chicago–As expected, price tags on commercial real estate around the world are dropping and LaSalle Investment Management is among the minority presently in a position to take advantage of bargains, the likes of which may not be seen again in decades. The Chicago-based firm has just formed a fund with the Austin-headquartered Teachers Retirement System of Texas to invest an initial sum of $205 million in real estate across North America.

LaSalle and TRS will establish partnerships with private equity concerns for co-investment with the fund. At the outset, those alliances will center on general partnership fund managers that have existing relationships with TRS, and will focus on macro-level strategies for the first two or three years. “We have a long history of successfully working with numerous partners on a wide array of real estate investments,” Dan Witte, Managing Director, LaSalle Investment Management, noted in a prepared statement. “We believe that this capital–flexible, efficient and market-sensitive–will be well-received by potential partners today.”

The fund, to be managed by LaSalle, will seek to create a diversified portfolio of various property types, first targeting selected markets in North America, with plans to expand to global opportunities.

With a multi-billion-dollar pool of assets carrying debts nearing maturity, various funds are popping up to take advantage of the plummeting prices on these distressed properties. Recently, Toronto-based Brookfield Asset Management and Brookfield Properties Corp. announced the launch of a $4 billion investor consortium to invest in equity and debt in undervalued real estate companies and portfolios around the world. In July, Boston-based closed real estate investment firm Marcus Partners closed Marcus Capital Partners Fund I with $210 million in capital commitments to invest in office, bio-medical, medical office and light industrial properties in major metropolitan areas primarily east of the Mississippi River.