Carlyle RE Fund Hits $4.2B Hard Cap

WASHINGTON, DC—The Carlyle Group has reached the hard cap on its seventh US real estate fund, Carlyle Realty Partners VII L.P. At $4.2 billion, the fund, which was launched in 2013, is nearly half again as large as its predecessor.

Bloomberg Business reported Wednesday that more than one-third of the $2.3-billion CRP VI was allocated to multifamily investments, and the new fund is also expected to have a strong emphasis on apartments. The alternative asset manager's six previous funds acquired a total of 42,000 rental apartment units, as well as more than 20,000 units across the student housing, seniors housing and residential condominium sectors.

The CRP funds have also been active across the other property sectors, as well, acquiring approximately 41 million square feet of office, industrial, data center and retail properties. In all, Carlyle has completed more than 500 investments across its seven US real estate funds, targeting 30 metropolitan areas with strong fundamentals including New York City and the Bay Area as well as Washington, DC, where it's headquartered.

Investors in CRP VII included a mix of repeat participants and Asian and European sovereign wealth funds coming in for the first time. Among the investors were Alistithmar Capital, owned by Saudi Investment Bank; Moneda SA Administradora General de Fondos, based in Chile; and Butterfield Asset Management of Bermuda, according to an SEC filing.

“We believe the robust interest in CRP VII is acknowledgement of our successful focus on opportunistic investments in US real estate, and we look forward to continuing to create value in our portfolio,” says Robert Stuckey, managing director and head of Carlyle's 85-member US real estate team since 1998. In an interview with Bloomberg, Stuckey acknowledged that opportunistic buys such as those CRP VII will target are becoming more challenging amid real estate values that are now about 18% above the 2007 peak.