NEW YORK CITY-Vornado Realty Trust on Thursday said it hascompleted the first closing of its real estate investment fund withinitial equity commitments of $550 million, including $200 millioncontributed by the locally based REIT. Vornado expects totalcommitments of $1 billion for the fund, which is reportedlytargeting IRRs of up to 20% on high-quality office properties inkey markets.

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The Wall Street Journal first reported a year ago thatVornado was planning to launch a private equity fund with a focuson distressed properties, particularly in areas where the companyalready has a presence, including New York City and Washington, DC.Reportedly known as Vornado Capital Partners LP, the fund isVornado’s first with institutional investment limited partners.

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According to a release, subsidiaries of Vornado will serve asthe general partner and investment manager. Vornado says the fundwill be its exclusive investment vehicle for all real estate andreal estate-related investments that fit within the fund’sinvestment parameters for its three-year investment period. Thispast April, the Oregon Public Employees Retirement Fund approved a$100-million commitment to the Vornado fund.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.