largest pe real estate in world

In conjunction with:

The LargesT PrivaTe equiTy reaL esTaTe Firms in The WorLdAnatomising the impact of the PERE 30

Edited by Wanching Leong and David Snow

A PRIVATE EQUITY INTERNATIONAL PUBLICATION

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INTRODUCTION IV

THE PERE 30 2008 VII

SECTION A: PERE 30 BY THE NUMBERS 9

Fundraising 10

Deal Activity 12

Fees 22

Operations 24

Index of Charts 27

SECTION B: PEI 50 FIRM PROFILES 29

1. The Blackstone Group 31

2. Morgan Stanley Real Estate 37

3. Tishman Speyer 43

4. Goldman Sachs Real Estate

Principal Investment Area 49

5. Colony Capital 55

6. Lehman Brothers Real Estate 61

7. The Carlyle Group 67

8. ProLogis 73

9. Beacon Capital Partners 79

10. LaSalle Investment Management 85

11. MGPA 91

12. AEW 97

13. Rockpoint Group 103

14. Apollo Real Estate Advisors 109

15. CB Richard Ellis Investors 115

16. RREEF Alternative Investments 121

17. Grove International Partners 127

18. Shorenstein Properties 131

19. The JBG Companies 137

20. Citigroup Property Investors (CPI)

Capital Partners 143

21. JER Partners 149

22. Walton Street Capital 155

23. Heitman 161

24. Aetos Capital 167

25. KK daVinci 173

26. Lubert-Adler 179

27. Starwood Capital 185

28. Fortress Investment Capital 191

29. DLJ Real Estate Capital Partners 197

30. RLJ Development 203

ABOUT PEI MEDIA 210

Contents

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Introduction

ABOUT The LargesT PrivaTe equiTy reaL esTaTe Firms in The WorLdThis book is an in-depth look at the private eq-uity real estate firms that are annually ranked in the PERE 30, Private Equity Real Estate magazine’s proprietary list of the largest pri-vate equity real estate direct-investment pro-grammes in the world.

The Largest Private Equity Real Estate Firms in the World: Anatomising the impact of the PERE 30 should be of great interest to anyone who needs to better understand how the larg-est private equity real estate firms differ from one another, as well as the impact they have on global markets, both individually and in ag-gregate.

We have divided the book roughly into two sections. The first section, called “By the Num-bers”, looks at the aggregate impact that the largest private equity real estate firms in the world have had on the global markets. Given that these thirty firms control the bulk of all capital committed to private equity real estate, it is appropriate to use these statistics as a proxy for private equity’s role in the broader real estate market.

The second section of this book profiles each of the PERE 30 firms in apples-to-apples cat-egories. You will find information about per-sonnel and capital under management, strat-egy descriptions and a brief report on what the firms have been up to recently. Each profile includes a recent article about the firm from a PEI Media publication.

Crucially, in partnership with Real Capital An-alytics, we have built snapshots of each PERE 30 firm’s private equity real estate transaction activity. In all cases, the deal activity is confined to the period between 1 January 2003 and 15 April 2008 – this is the same window we use in collecting fundraising information for the PERE

30 rankings. The deal data will allow you to compare ac-

quisition and disposal activity among the larg-est private equity real estate firms, as well as to see how the firms compare to each other by way of property types and geographic deal ac-tivity.

ABOUT THE PERE 30Keeping in mind that returns are much more important than size, why would anyone want to create a ranking of private equity real estate firms by size? Short answer: Because our read-ers will absolutely love it.

Over the years that we’ve been covering the real estate and private equity industries, we have received numerous phone calls from peo-ple who want to know the answer to a seem-ingly simple question – what are the largest firms? In reality, the question can be answered any number of ways. Do you mean the current value of all the property owned by the firm? Is it the value of the undrawn capital committed to the firm’s funds? Is it capital raised over the life of the firm?

We at Private Equity Real Estate (PERE) mag-azine think we have come up with a unique and powerful apples-to-apples methodology for measuring “size” that takes into account a firm’s heft going forward while indicating the scope of its recent investment activity. Rankings are based on the amount of private equity real estate direct investment capital raised from 1 January 2003 until 15 April 2008.

Below are the rules and definitions used to create the PERE 30 ranking.

WHAT IS THE PERE 30?The PERE 30 is a ranking of private equity real estate firms globally by size. It is the only apples-to-apples comparison of dedicated, di-

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rect-investment private equity real estate pro-grammes. The PERE 30 follows on the success of a similar ranking unveiled last year called the PEI 50, which ranked private equity firms.

Both the PERE 30 and PEI 50 are produced by PEI Media, the publisher of PERE and Private Equity International magazines. The PERE 30 is not a performance ranking, nor does it con-stitute investment recommendations.

The PERE 30 includes private equity real es-tate firms with varying structures and strate-gies around the world. The PERE 30 list is made up only of private equity real estate firms that manage primarily private equity real estate-focused limited partnerships. The rankings are based on capital raised over a five-year period for dedicated, direct-investment private equity real estate programmes, as defined below.

HOW WE dETERMINE THE RANKINGSThe PERE 30 rankings are based on the amount of private equity real estate direct-investment capital raised over a roughly five-year period leading up to press time. For 2008, the five-year window spans 1 January 2003 to 15 April 2008, when the May 2008 issue of PERE magazine went to press. Future rankings will be drawn from a similar 64-month window.

In coming up with our key “PERE 30 five-year fundraising total”, upon which the PERE 30 rankings are based, we rely on the most accurate information available to answer this question of each firm: How much private equity real estate capital has the firm raised since 1 January 2003?

Where two firms have raised the same amount of capital, the higher PERE 30 rank goes to the firm with the larger active pool of capital raised since 2003 (i.e. the larger single fund).

ACCURACY ANd CONFIdENTIALITYWe give highest priority to information that we receive from the private equity real estate firms themselves, often on background.

When the private equity real estate firms themselves confirm details, we seek to “trust, but verify.” Some details simply cannot be veri-fied by us, and in these cases we defer to the

honour system. In order to encourage coopera-tion from private equity real estate firms that might make the PERE 30, we do not disclose which firms have aided us on background and which have not.

Lacking confirmation of details from the firms themselves, we seek to corroborate information using available news reports, press releases, third-party databases, etc.

dEFINITIONS“Private equity real estate”: The definition of private equity real estate, for the purposes of the PERE 30, means equity capital raised for a dedicated programme of investing directly into property, primarily. The capital is raised primar-ily in blind-pool limited partnerships. These in-vestment programmes are further distinguished in that they do not primarily pursue what is often described as “core” or “core-plus” investment strategies, but rather “private equity”, “opportu-nistic” and/or “value-added” strategies. The fund managers primarily do not seek to own the assets in perpetuity but to eventually exit them, realis-ing a capital gain and generating an internal rate of return for the fund and its investors. Within the private equity real estate market there are certainly gray areas with regard to strategy defi-nitions, but PERE took pains to ensure that the capital counted for the purposes of the PERE 30 fell within our definition of “private equity real estate” to furthest extent possible.

“Capital raised”: This means capital defini-tively committed to a private equity real estate direct investment fund. In the case of a fund-raising, it means the fund has had a final or official interim closed on or after 1 January 2003. The full amount of a fund if it has close on or after this date may be counted. The full amount of an interim close (a real one, not a “soft-circle”) that has occurred recently, even if no official announcement has been made, may also be counted. We also count capital raised through other means, such as co-investment vehicles and deal-by-deal co-investment capi-tal and earmarked annual contributions from a sponsoring entity. Further rules are below.

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What does not count as “private equity real estate”?

• Funds of funds: In the case of a primarily fund-of-funds programme, we only count direct investment capital raised, if any.

• Separate accounts • Private equity: We do not count capital

raised for primarily private equity (i.e. operat-ing business-focused) strategies. Many private equity real estate firms will invest in operating businesses, but their primary focus is on prop-erty investment.

• Infrastructure: We do not count capital raised for primarily infrastructure investment strategies.

• Structured debt: We do not count capital raised for any collateralised bond obligation or debt obligation programmes.

• Debt investment funds: We do not count debt investment funds, including mezza-nine debt.

What about hedge funds and other pools of capital?We do count private equity real estate capital raised in a segregated fashion, and overseen by a dedicated real estate team, by primarily liquid securities investment managers (hedge funds). However, we do not count capital or give weight to a hedge fund’s ability to opportunistically pursue direct private equity real estate oppor-tunities. As with many hedge funds, some large entities have the ability to do private equity real estate deals on an opportunistic basis. We do not include these groups in the rankings. We only count capital raised for dedicated private equity real estate programmes.

What counts as “capital raised”?• Limited partnerships: In most cases, private

equity real estate firms raise money through commitments to limited partnerships. In some cases, investment capital is raised in other ways, for example through contributions from an affili-ated entity. In all these cases we have sought to accurately determine how much investment cap-ital has been created for the financial sponsor in question over the specified five-year period.

• Co-investment capital: Where possible and appropriate, we count LP co-investment vehi-cles as well as opportunistic LP co-investment capital raised by private equity real estate sponsors. This co-investment capital must be invested alongside a primary limited partner-ship, not established for a one-off deal or sep-arate account. In deals where multiple spon-sors have raised co-investment capital, we only counted the firm’s pro-rata share of the co-investment capital raised (in other words, if a firm and three other firms raise $1 bil-lion in LP co-investment capital for a deal, no firm is allowed to count the whole $1 billion for itself).

• Affiliated programmes: We counted private equity real estate capital raised by affiliated entities so long as the firm has control over those entities, or the vehicles raised bear the clear branding of the firm.

• Contributions from sponsoring entities: Where a larger entity has earmarked capital to a firm for a dedicated, direct private equity real estate programme, we counted the amount of capital a firm drew down from that entity for direct private equity deals over the defined five-year period.

What does not count as “capital raised”?• Expected capital commitments, No matter

how confident a firm was about its eventual fundraising goals, we did not count “soft-” or “hard-circled” commitments – only official final and interim closes.

• Opportunistic capital: As stated above, an entity that has the ability to opportunisti-cally do large private equity real estate deals, but does not have a dedicated programme or team for doing so, was not considered for the rankings. In other words, a large group has the ability to tap $40 billion in equity won’t be counted unless that equity has been seg-regated into a specific vehicle or programme and assigned a dedicated private equity real estate direct-investment team that is actively scouting for deals.

• Open-ended funds or publicly traded ve-hicles.

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The PERE 30 2008The PERE 30 is Private Equity Real Estate magazine’s ranking of the 30 largest private equity real estate firms in the world. Our method of mea-suring “size” is intended to capture a firm’s heft in the market going forward, as well as the scope of its recent deal activity. We use an apples-to-apples methodology: the amount of private equity real estate direct-investment capital raised or created over the past five years (see p. IV for our methodology). This list is global and includes a broad range of dedicated private equity real estate investment platforms, from private managers of blind-pool limited partnerships to publicly-traded investment firms.

Notes: “Five years” defined as 1 January 2003 to 15 April 2008. All euro figures were converted to US dollars at 1.58 exchange rate. Other currencies were converted at current prices.

2008 Capital raised over Rank Name of firm Headquarters last five years*

1 The Blackstone Group New York $19.75 billion 2 Morgan Stanley Real Estate New York $16.77 billion3 Tishman Speyer New York $11.36 billion4 Goldman Sachs Real Estate Principal Investment Area New York $11.19 billion5 Colony Capital Los Angeles $10.95 billion6 Lehman Brothers Real Estate New York $10.15 billion 7 The Carlyle Group Washington DC $9.6 billion8 ProLogis Denver (Colorado) $8.8 billion9 Beacon Capital Partners Boston $8.08 billion10 LaSalle Investment Management Chicago $6.69 billion11 MGPA London $6.56 billion12 AEW Boston $5.78 billion13 Rockpoint Group Boston $5.75 billion14 Apollo Real Estate Advisors New York $5.4 billion15 CB Richard Ellis Investors Los Angeles $5 billion 16 RREEF Alternative Investments New York $4.81 billion17 Grove International Partners London $4.03 billion18 Shorenstein Properties San Francisco $3.94 billion19 The JBG Companies Chevy Chase (Maryland) $3.88 billion20 Citigroup Property Investors (CPI) Capital Partners New York $3.72 billion21 JER Partners McLean (Virginia) $3.67 billion22 Walton Street Capital Chicago $3.57 billion23 Heitman Chicago $3.23 billion24 Aetos Capital New York $2.94 billion25 KK daVinci Tokyo $2.8 billion26 Lubert-Adler Philadelphia $2.8 billion27 Starwood Capital Greenwich (Connecticut) $2.38 billion 28 Fortress Investment Group New York $2.37 billion29 DLJ Real Estate Capital Partners New York $2.35 billion30 RLJ Development Bethesda (Maryland) $2.26 billion

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PERE 30 BY ThE NUMBERS

AcqUISITIONS AND DISPOSALS1 January 2003 - 15 April 2008

2005 20062003

$12,050

$13,205

$25,208

$28,774

$57,699

$32,565

2004 2007 2008

AcquisitionsDisposals

-150,000

-100,000

-50,000

0

50,000

100,000

150,000

200,000

250,000

300,000

$51,874

$92,952

$257,607

$24,274

$27,175

$127,053

Deal Volume ($m) # Properties # Units Deal Volume ($m) # Properties # Units2003 12,050 444 103,284,257 13,205 299 94,345,983 2004 25,208 1,207 285,727,790 28,774 680 237,010,013 2005 57,699 1,935 842,241,072 32,565 766 183,588,760 2006 92,952 1,925 519,792,398 51,874 712 197,877,361 2007 257,607 5,193 1,009,595,982 127,053 2,351 467,534,891 2008 24,274 343 86,434,779 27,175 382 90,133,389

Acquisitions Disposals

Notes: Data not available for Grove International Partners. Data for the number of property transactions does not include the acquisition of operating companies but of underlying property assets.

Source: Real Capital Analytics

DEAl ACTIVITy

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PERE 30 BY ThE NUMBERS

FUNDRAISINGBy the NumbersPERE 30 Fundraising in Context10 Biggest Funds Raised by the PERE 30

DEAl ACTIVITyPERE 30 Deal Activity at the GlanceDeal ValueSector FocusDeal DominanceAcquisitions and DisposalsThe Most Active Acquirors of Real Estate AssetsTop 10 Real Estate AcquisitionsThe Most Active Divestors of Real Estate AssetsTop 10 Real Estate DisposalsAcquisitions by Property TypeDisposals by Property TypeTop Financial Sponsor Acquirors by Property TypeAcquisitions by GeographyDisposals by Geography

FEESFees by Deal TypeTop 10 Recipients of PERE 30 Fees PaidTop Fee Payers

OPERATIONSAge is but a NumberDollars Raised per PERE ProThe US vs. the World

PERE 30 Index of Charts

INDEx OF chARTS

PERE 30 profile:Starwood Capital

27

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Starwood Capital

Founded

Headquarters

Other offices

Website

Strategy

Affiliates

SNAPSHOT

1991

Starwood Capital Group591 West Putnam AvenueGreenwich, Connecticut 06830USATel: +1 203 422 7700; Fax: +1 203 422 7784

Atlanta, London, Luxembourg, Mammoth (California), Mumbai, Paris, San Francisco, Singapore, Tokyo

www.starwoodcapital.com

Makes opportunitistic investments in multifamily, office, retail, hotel, industrial, land and mixed use properties in Asia, Europe and the Americas. Also acquires real estate securities.

Starwood Energy Group Global (energy infrastructure)

Starwood Capital has literally revolutionised the hotel industry thanks to the vision of chairmanand chief executive officer Barry Sternlicht. A man renown for being as good at evaluatingbalance sheets as bed sheets, Sternlicht has grown Starwood into a global brand. From its earlydays focused on the multifamily sector, Starwood is now renowned for its hotel investments, notleast the luxury boutique W Hotels and St Regis. In 2005, Starwood announced plans to launchthe ultra-exclusive Crillon brand following its $3.2 billion purchase of Groupe Taittinger, ownerof Taittinger champagne, and Société du Louvre, Europe’s second largest hotel operator. TheCrillon brand would feature as its flagship the legendary Hôtel de Crillon, which overlooks thePlace de la Concorde in Paris. The hotel was the location of choice for the American delegationwhile they negotiated the Treaty of Versailles. The deal confirmed Starwood as being amongthe leading hotel investors in the world. For anyone who knows Sternlicht, there is oneundeniable reason for Starwood’s success: he never slows down. Despite stepping downas chief executive of the Starwood Hotels and Resort REIT he founded, Sternlicht says he’sconstantly looking for the next deal. As he told Portfolio magazine: “You know, it’s like a shark.You stop, you die. Right? You die.”

272008 PERE 30 rank 272008 PERE 30 five-year fundraising total $2.38 billion

STARWOOd CAPITAL

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27

Number of private equity real estate partnersNumber of private equity real estate professionals

Whole firm employee count

FUNdRAISINGTotal private equity real estate capital raised since inception

Property fund assets under managementStated current assets under management, whole firm

Recent private equity real estate fundraising activity

Selected LPs

KEY PEOPLE

PROFILE

Name Function Location Previous ExperienceBarry Sternlicht Chairman and CEO Greenwich Chairman and CEO of Starwood Hotels & Resorts Worldwide Barden Gale Vice Chairman, Real Estate Greenwich Real estate chief investment officer at ABP Investment US Jeffrey Dishner Senior Managing Director Greenwich Commercial mortgage finance banker at JP Morgan & Co Marc Perrin Managing Director Greenwich Real estate banker at Salomon Brothers Christopher Graham Managing Director Greenwich Financial consulting group director at CB Richard Ellis Jerome Silvey CFO Greenwich Price Waterhouse Dan Yih COO Greenwich Chief operating officer at GTCR Golder Rauner Madison Grose Co-General Counsel Greenwich Founding partner of Pircher, Nichols & Meeks Ellis Rinaldi Co-General Counsel Greenwich Principal at Rinaldi, Finkelstein & Franklin Heather Goldman Investor Relations Greenwich CEO of Capital Thinking

N/AN/A170

$5.8 billion$21.0 billion$14.3 billion

Fund date closed Amount raised

Starwood Global Opportunity Fund VII December 2005 $1.475 billion

Starwood Capital Hospitality Fund I November 2005 $900 million

California Public Employees Retirement System, Kansas Public Em-ployees Retirement System, New Mexico Public Employees Retirement Association, New York State Teachers’ Retirement System, Ohio Police & Fire Pension Fund, Oregon Public Employees Retirement System, Pennsylvania State Employees Retirement System, San Bernandino County Employees’ Retirement Association, Teachers’ Retirement Sys-tem of Louisiana, University of British Columbia Endowment. Source: PERE Connect

STARWOOd CAPITAL


27

36.7%

79.7%

9.6%

10.7%

63.3%

68.0%

38.3%

33.0%

24.2%

2.2%1.2%

1.2%0.2%0.5%

4.7%

7.2%

19.3%

2005 20062003

$197

$686

$999

$1,436

$1,100

$114

$3,132

$1,531

$400

$2,169

2004 2007 2008

Acquisitions

Disposals

Hotel Office Apartment

Development site Retail Industrial

Hotel Retail Office

Industrial Development site Apartment

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

$1,912

$733

Europe North America North America Asia Europe

dEALSTotal number of real estate portfolio investments since inception

Number of current private equity real estate portfolio investmentsValue of private equity real estate assets acquired

300+N/A$21 billion

STARWOOd CAPITAL dEAL ACTIVITYThe following charts, provided by Real Capital Analytics, are of acquisitions and disposals that involved the equity participation of this firm. Data for the number of property transactions does not include the acquisition of operating companies, but of underlying property assets. Geographic data before 2007 relates primarily to US and UK transactions only.

dEAL ACTIVITY

Year Deal volume ($m) # Units # Properties Deal volume ($m) # Units # Properties2003 197 892,971 2 686 7,543,752 37 2004 114 2,600,840 8 999 3,133,099 86 2005 3,132 491,784,145 258 1,436 7,924,011 34 2006 1,531 5,785,822 13 1,100 3,744,279 21 2007 400 779,600 12 1,912 3,767,174 15 2008 2,169 5,761,800 73 733 197,100 1 Total 7,543 507,605,178 366 6,866 26,309,415 194

$m

Announced deal Volume 1 January 2003 - 15 April 2008

Acquisitions disposals

Notes: data for Africa and South America was not available in 2003 and not available for the Middle East for 2003 and 2004. Data for the PERE 30 firms before 2007 relates primarily to US and UK transactions only. Data for the number of property transactions does not include the acquisition of operating companies but of underlying property assets.


STARWOOd CAPITAL

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27

36.7%

79.7%

9.6%

10.7%

63.3%

68.0%

38.3%

33.0%

24.2%

2.2%1.2%

1.2%0.2%0.5%

4.7%

7.2%

19.3%

2005 20062003

$197

$686

$999

$1,436

$1,100

$114

$3,132

$1,531

$400

$2,169

2004 2007 2008

Acquisitions

Disposals



Hotel Retail Office


-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

$1,912

$733


36.7%

79.7%

9.6%

10.7%

63.3%

68.0%

38.3%

33.0%

24.2%

2.2%1.2%

1.2%0.2%0.5%

4.7%

7.2%

19.3%

2005 20062003

$197

$686

$999

$1,436

$1,100

$114

$3,132

$1,531

$400

$2,169

2004 2007 2008

Acquisitions

Disposals



Hotel Retail Office


-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

$1,912

$733


Acquisitions by Property Type1 January 2003 - 15 April 2008

dEAL ACTIVITY

disposals by Property Type1 January 2003 - 15 April 2008

Acquisitions by Geography1 January 2003 - 15 April 2008

disposals by Geography1 January 2003 - 15 April 2008

Deal volume ($m) Square footage # PropertiesApartment 552 3,989,700 13Development site 356 480,755,035 6 Hotel 5,191 18,237,150 336 Industrial 15 330,971 1 Office 1,475 3,348,172 9 Retail 40 1,099,400 2

Deal volume ($m) Square footage # PropertiesHotel 2,627 2,755,350 17 Retail 2,264 13,618,056 131 Office 1,660 5,689,508 23 Industrial 152 3,014,117 19 Development site 84 1,066,784 3 Apartment 79 165,600 1

36.7%

79.7%

9.6%

10.7%

63.3%

68.0%

38.3%

33.0%

24.2%

2.2%1.2%

1.2%0.2%0.5%

4.7%

7.2%

19.3%

2005 20062003

$197

$686

$999

$1,436

$1,100

$114

$3,132

$1,531

$400

$2,169

2004 2007 2008

Acquisitions

Disposals



Hotel Retail Office


-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

$1,912

$733


Deal volume ($m) # PropertiesAsia 733 1 Europe 661 7 North America 5,472 186

Deal volume ($m) # PropertiesAsia 0 N/A Europe 4,832 320 North America 2,797 47

36.7%

79.7%

9.6%

10.7%

63.3%

68.0%

38.3%

33.0%

24.2%

2.2%1.2%

1.2%0.2%0.5%

4.7%

7.2%

19.3%

2005 20062003

$197

$686

$999

$1,436

$1,100

$114

$3,132

$1,531

$400

$2,169

2004 2007 2008

Acquisitions

Disposals



Hotel Retail Office


-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

$1,912

$733



Source: Real Capital AnalyticsSource: Real Capital Analytics


Notes: data for the number of property transactions does not include the acquisition of operating companies but of underlying property assets.

Notes: Data for the PERE 30 firms before 2007 relates primarily to US and UK transactions only.

Notes: Data for the PERE 30 firms before 2007 relates primarily to US and UK transactions only.

Notes: data for the number of property transactions does not include the acquisition of operating companies but of underlying property assets.

STARWOOd CAPITAL


27

A new kind of room service

Starwood Capital has purchased 16 restaurants from BR Guest, a New York-based restaurant owner and operator, and entered into a joint venture with the company in a series of trans-actions reportedly valued at approximately $150 million (€115 million).

Under the terms of the deal, which was an-nounced in a statement released last month, BR Guest will continue to manage the restaurants. At the same time, the company has formed a 50-50 joint venture with Starwood to develop new projects in the private equity real estate firm’s burgeoning hotel empire, as well as new free-standing restaurants.

Last year, Starwood announced that BR Guest would develop the dining establishments for the company’s new environmentally friendly line of hotels, called “1”.

The restaurants in BR Guest’s portfolio in-clude a number of well-known eateries in New York City such as Blue Water Grill, Dos Caminos and Ruby Foo’s, as well as two restaurants in Chicago and one in Las Vegas. Later this year, the company will open another outpost of its Primehouse steakhouse in New York City, as well as a Dos Caminos in the Venetian hotel in Las Vegas. Hanson notes that the company will also expand into the Caribbean and Europe.

The joint venture with Starwood will allow BR Guest to acquire other restaurant operators as well.

BR Guest is run by restaurant entrepreneur Steve Hanson. Hanson worked with Starwood Capital founder Barry Sternlicht on Blue Fin, a BR Guest restaurant located in the lobby of the W Hotel in Times Square, which opened in the beginning of 2002. At the time, Sternlicht was the chairman and chief executive officer of Starwood Hotels, where he developed the com-pany’s W hotel chain.

Today, Starwood Capital continues to have a significant presence in the hospitality industry. In addition to the “1” line of hotels, the first of which is expected to open in Seattle in 2008, Starwood owns a portfolio of hotels in Europe including Société du Louvre and Le Meridien. In December, Starwood also invested $30 million in Shanghai’s Jin Jiang International Hotels, acquiring an approximate 10 percent stake in one of China’s largest hotel owners. Starwood also owns Mammoth Mountain, a ski resort in California, that offers another potential outlet for future BR Guest restaurants.

From Private Equity Real Estate May 2007

Starwood Capital has formed a joint venture with the restaurant company BR Guest to develop new eateries for its hotel portfolio.

EdITORIAL ExCERPT FROM THE PEI MEdIA ARCHIVE

largest pe real estate in world

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