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Friday Letter With friends like these...On April 9, 2003, Steve Schwarzman and Barry Sternlicht joined together, presumably for the first time, in a friendly game of hoops. At the Chelsea Piers sports complex on the West Side of Manhattan, the two private equity bigwigs competed in a charity basketball event that pitted them against a team of female collegians. And despite the handicaps of age and athleticism—Schwarzman had missed the event the previous year due to a skiing injury—Schwarzman and Sternlicht were able to eke out a 40-38 victory.
- Friday Letter Let's get this party started
The rising public profile of private equity was brought into stark relief earlier this week when Steve Schwarzman, the co-founder of The Blackstone Group, hosted his 60th birthday party in New York City. Sure, LBO moguls have always thrown lavish parties for themselves—Schwarzman’s bash reportedly cost $3 million—but rarely have they received so much press in the international media.
- Friday Letter The envelope please...
In a year that witnessed one of the most active and dynamic periods in the history of the private equity real estate industry, it was only natural that 2006 would also herald our first annual awards.
- Friday Letter PERE goes to MIPIM
Last night, the three-day extravaganza known as MIPIM, the world’s largest property conference, came to a close. But as approximately 25,000 real estate revelers leave the south of France, conference delegates of a different sort will soon be streaming in. In a few weeks time, Cannes will host not only the legendary film festival, but also the Hot D’Or, otherwise known as the European adult video awards. Coincidence? Perhaps not.
- Friday Letter Castles of gold
Not since the initial public offering of Goldman Sachs in 1999 have so many people spent so much time with their noses buried in SEC documents. After all, who knew it could be so much fun?
- Friday Letter Tapas for the masses
Given its recent form, The Blackstone Group is not the firm to pick a fight with. During its last high-profile skirmish in the property world, Schwarzman and Co. brushed aside the combined might of Vornado Realty Trust, Starwood Capital and Walton Street to buy Equity Office Properties for $39 billion, the largest private equity real estate deal ever.
- Friday Letter Selling the sizzle
Last month, a group of reporters gathered at the New York City headquarters of a large investment bank for an off-the-record discussion on the growth in the alternative asset industry. Journalists from The New York Times, The Wall Street Journal and The Financial Times were in attendance, as were members of slightly less august publications. And given the relevance of the topic—two weeks earlier, The Blackstone Group had announced its intentions to go public—the bankers addressed an audience hungry for information.
- Friday Letter Riding the rails
Earlier this week, Fortress Investment Group agreed to buy Florida East Coast Industries, a railroad company and real estate concern, for $3.5 billion (€2.7 billion). Yes, you read that correctly: a railroad company.
- Friday Letter Real estate goes 'mega'
The big subject on everyone’s mind this week was the mammoth $8-billion (€6 billion) real estate vehicle announced by Morgan Stanley, which is currently the largest private equity real estate fund ever raised. Morgan Stanley Real Estate Fund VI International, which will target assets in Western Europe, Japan, Australia and emerging markets, is far larger than the previous record holder, Blackstone Real Estate Partners V, which closed on $5.3 billion in 2006.
- Friday Letter Cash is king
The credit crunch is causing a real headache for real estate investors in the US and across Europe. But a return to a situation similar to the early 1990’s means those with cash will rule.