Has real estate fundraising hit the wall?
Early numbers are in for real estate investment funds closing in first quarter 2017 — and they look a bit anemic when compared with the same period of 2016, which itself saw less capital raised than in first quarter 2015. Because 2016 ended with less capital raised in total than 2015, you have to wonder if we are in the beginning of a real downturn.
Preliminary data from Institutional Real Estate, Inc.’s FundTracker database indicates only 18 funds closed in first quarter 2017. In total, they raised $12.3 billion. In 2016, 33 funds closed in the first quarter, with an aggregate raise of $20.6 billion. That is quite a difference between the two years. Going back one more year to 2015, we find 33 funds closing in the first quarter. This overachieving group closed with $32.7 billion in commitments. First quarter 2015 saw the record-breaking Blackstone Real Estate Partners VIII close, so that skews the result a bit, but the trend remains the same. We are seeing less capital r