CRE Analyst Sep 14, 2023 8:00:00 AM

Inside Greystar's $60B Fund Pitch: Value-Add Strategy and Market Challenges

When was the last time you saw a $60B fund manager's pitchbook?

Greystar was recently pitching its most recent value-add vehicle, Greystar Equity Partners XI. 

According to an SEC filing, Greystar closed on $1.2B of commitments to the fund over the last 18 months, including $900M closed over the last year. The fund's raise has, to date, fallen short of its $3B goal but stands out in a very challenging fundraising market. 

----- FUND STRATEGY -----

Generate competitive value add returns via buy-and-improve (80%) and development (20%) in rental housing executions. Underwrite 1,000 to 1,500 opportunities a year. 

----- GREYSTAR PLATFORM -----

 -- $250B in properties under operation
 -- 740,000 beds managed worldwide
 -- $62B AUM
 -- 21,300+ staff

----- TRACK RECORD -----

 -- GEP I // $31M // 22% Net IRR
 -- GEP III // $303M // 21% Net IRR
 -- GEP VII // $584M // 20% Net IRR
 -- GEP VIII // $725M // 13% Net IRR
 -- GEP IX // $1.1B // 14% Net IRR
 -- GEP X // $1.6B // 12% Net IRR

GEP II, IV, and X were not included in Greystar's track record because they were non-discretionary, programmatic JVs. 

----- PROPOSED TERMS -----

 -- $2.5B TO $3.0B targeted raise
 -- Greystar to invest 3%
 -- 1.5% management fee
 -- Performance fee: 20% over 8% with 50/50 catch-up
 -- 3-year investment period from initial closing
 -- 8-year fund period from initial closing

 

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