Brookfield Asset Management Ltd. is aiming to raise $15 billion for its fifth flagship real estate fund, less than its previous version, according to people familiar with the matter, as the global property market is roiled by rising borrowing costs.
(Bloomberg) — Brookfield Asset Management Ltd. is aiming to raise $15 billion for its fifth flagship real estate fund, less than its previous version, according to people familiar with the matter, as the global property market is roiled by rising borrowing costs.
Brookfield, one of the world’s largest owners of prime office properties, started raising money earlier this year for the new vehicle just months after closing its fourth fund at $17 billion. A spokesperson for the Toronto-based asset manager declined to comment.
Office landlords around the world are being squeezed by higher interest costs, falling property prices and low occupancy rates as employees continue working from home. Fee-bearing capital in Brookfield Asset’s real estate business dipped to $98 billion in March from $103 billion at the end of last year.
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The Brookfield group has defaulted on mortgages covering more than a dozen office buildings, mostly in Los Angeles and around Washington, DC. Recently it handed a receiver control of EY Plaza, a 41-floor tower in Los Angeles, where the downtown office vacancy rate has reached 30%.
Brookfield Chief Executive Officer Bruce Flatt told investors the problems are isolated to those assets and aren’t material to the firm’s sprawling real estate business, which includes New York’s Manhattan West and London’s Canary Wharf.
Brookfield has more than $825 billion in assets under management, with $270 billion in real estate as of March.Â
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