: KKR, Starwood limit withdrawal requests from real-estate funds as investors try to cash in

by | Jan 19, 2023 | Stock Market

Nontraded real-estate funds managed by KKR & Co. and Starwood received more requests for redemptions from investors than they were able to grant under the operating rules of the investment vehicles, the firms said in filings. The redemption requests came after the funds managed to outperform public real-estate investment trusts (REITs) in 2022, which may have prompted some investors to turn to the vehicles for cash. In the case of KKR, some of its fund is dedicated to floating-rate interest vehicles, which benefit when interest rates rise.

Real-estate investing has been less bullish overall as the cost of borrowing has risen and dampened deal activity, while demand for some office space has been slack as people continue to work from home in the wake of the COVID-19 pandemic. The moves by KKR and Starwood come after Blackstone Inc.
last month limited redemptions from the massive Blackstone Real Estate Income Trust. Earlier this month, Blackstone Real Estate Income Trust also received a $4 billion investment from the Regents of the University of California. Also read: Blackstone’s Gray: ‘We didn’t want to have to sell assets at the wrong time, under pressure,’ after $69 billion REIT limits withdrawals Starwood disclosed that its $4.2 billion Starwood Real Estate Income Trust Inc. honored 63% of redemption requests in November and 20% of stockholder share-repurchase requests in December, after it hit its 5% redemption cap in both months. Starwood Capital Group, a private real-estate investment firm, was founded by Barry Sternlicht, who is chair of Starw …

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