Bloomberg – KKR & Co. raised $4.3 billion for its third opportunistic real estate fund as the buyout firm turns its attention to acquiring assets that are pandemic proof.
The new fund, KKR Real Estate Partners Americas III, will focus largely on U.S. investments, according to the firm. It has already committed more than $1 billion to industrial properties, rental housing, self storage, student housing and lodging. Backers include new and existing investors from pensions to sovereign wealth funds.
KKR is ramping up real estate bets at a tenuous time for parts of the sector. It’s steering clear of segments battered by the Covid-19 crisis, such as office buildings from the 1970s and ‘80s in major markets. The firm is now seeking out investments in warehouses and single-family rentals and has been active in buying life sciences buildings. In March, it paid about $1.1 billion for a San Francisco office complex it plans to repurpose for such tenants.
“We’re leaning into the demand drivers that have been accelerated by Covid,” Ralph Rosenberg, global head of KKR Real Estate, said in June at a Morgan Stanley conference.
KKR’s latest Americas real estate fund is more than double the size of its second such pool, which brought in $2 billion in 2018. The New York-based firm managed $429 billion in total assets as of midyear.