Advertisement
Cottonwood Group, a private equity real estate firm, has closed a USD 1 billion fund focused on special situations across U.S. commercial property. The fund, which exceeded its USD 500 million target, combines capital raised through pooled funds and separate accounts. Around USD 300 million has already been invested through structured loans with the option to acquire assets if defaults occur. The vehicle has delivered a return of nearly 20 percent so far. With investments spanning logistics, multifamily, data centers, and mixed-use assets, the strategy highlights rising investor appetite in a market facing refinancing stress.
Cottonwood Group has successfully closed its latest real estate special situations fund with commitments totaling USD 1 billion, surpassing the initial fundraising target of USD 500 million. The capital was gathered across both pooled funds and separate accounts, with the final close completed recently. Advertisement
The fund has already deployed close to USD 300 million, largely through loan structures that carry the option to take ownership of assets in the event of borrower default. These early investments cover a diverse range of property types, including industrial and logistics warehouses, multifamily apartments, data centers, and mixed-use projects in expanding U.S. markets.
Launched earlier, the fund has so far delivered an internal rate of return of about 20 percent. It was set up to provide flexibility in addressing opportunities across credit and event-driven equity, reflecting the firm?s approach of balancing downside protection with potential long-term gains.
The timing coincides with increasing pressure in the U.S. commercial real estate market. Delinquency rates on commercial mortgage-backed securities have climbed above 7 percent, while office loan delinquencies are closer to 11 percent. These conditions have prompted several investment managers, including Brookfield and Oaktree, to raise similar distressed or special situations funds, though Cottonwood?s capital pool remains relatively smaller.
Cottonwood Group operates from Los Angeles with offices also in Boston and New York. Since its inception, the firm has managed or advised on more than USD 7 billion in gross assets, steadily expanding its presence in the U.S. real estate market. The latest fund reflects not only investor interest in special situations strategies but also the group's ability to scale fundraising well beyond initial expectations.
Source: Bloomberg
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
