Scott Rechler’s RXR Realty is seeking $1 billion for a vehicle dedicated to making bets on real estate with the expectation that valuations may tumble as a result of the Covid-19 pandemic, Bloomberg News first reported.
- Dig Deeper: The developer plans to find “pockets of distress” such as non-performing debt and opportunities for rescue financing. It’ll focus on logistics, telehealth and residential wagers—areas of the property market that the firm believes will thrive in a post-Covid 19 world.
- Macro strategy: RXR foresees demand for transit-linked suburban downtown areas and conversion of obsolete buildings including hotels and malls into multifamily, industrial or film-studio properties, Bloomberg noted.
- Worth Noting: The new fund will target levered returns after fees between 12% and 16%. Institutional investors can co-invest additional capital alongside the fund, which would reduce the overall management fee that they pay, the presentation shows. [Bloomberg]