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NEW YORK CITY-Locally based Related Cos. has received a nearly $1.4 billion equity and debt investment, the first outside investment in the company. Goldman Sachs and MSD Capital LP have purchased equity stakes in Related totaling 7.5%. Three international companies will also invest through a debt placement, including an affiliate of Mubadala Development Co. and the Olayan Group.

In addition to the corporate investment, each investor will co-invest in future development opportunities undertaken by Related. The group of investors has been specifically selected to fund future growth, the company explains. The minority investment in Related includes no involvement in the governance of the company and there will be no change in the company’s management structure.

“This carefully-selected, prestigious group of investors will allow us to reinforce our position as one of the nation’s leading developers, managers and financiers of premier real estate properties,” notes Related chairman and CEO Stephen Ross in a prepared statement. “In the last decade, the size, scope and geographic diversity of Related’s development pipeline has increased dramatically with Time Warner Center and Moynihan Station in New York City, Grand Avenue in downtown Los Angeles, CityPlace in West Palm Beach, CityNorth in Phoenix and Snowmass Village in Colorado. As the industry continues to move toward bigger, more complicated development transactions, these new financial partnerships ensure that Related has a ready and deep source of capital to take advantage of virtually any opportunity regardless of size or scale.”

Related President Jeff Blau says that “this access to new capital offers Related a tremendous competitive advantage. We are currently involved in some of the most ambitious real estate developments in the nation and are competing for a once-in-a-lifetime opportunity—to create a 26-acre, vibrant mixed-use waterfront neighborhood at the West Side Yards in New York City. This investment into our company is more than a financial arrangement. These long-term relationships will provide us with the financial flexibility to capitalize quickly on even the most challenging future opportunities.”

Related’s current pipeline is comprised of projects across the nation including: Grand Avenue, a multi-phase 3.6 million-sf, $3 billion development spanning three city blocks in downtown Los Angeles; the $3 billion, 80-acre Snowmass Village Resort development in Colorado; the 144-acre CityNorth mixed-use development in Phoenix, Arizona; and the development of the 7.5 million sf Moynihan Station complex in New York City.

Related was advised by a team that included Goldman Sachs, Deutsche Bank and Eastdil Secured.

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