Brookfield backs recap as it hits RE fundraising trail

The process involving Elion Partners is at least the third sizeable deal executed by Brookfield since entering the real estate secondaries market last year.

Brookfield Asset Management has closed another real estate secondaries deal, growing its presence in a market it entered only last year.

The Toronto-headquartered asset manager has recapitalised a Chicago-based industrial park managed by Elion Partners, a minority-owned real estate operator and manager with $2 billion in assets under management, according to a statement seen by Secondaries Investor. Park Madison Partners advised on the deal.

Elion Logistics Park comprises five assets totalling 4 million square feet, located close to the BNSF railway, the largest freight network in the US, the statement said. It is not clear how much Brookfield paid for the five existing assets.

Elion has the option to develop up to 15 million square feet of additional property, with the whole site projected to be worth $1 billion once complete.

Brookfield will commit to the future development of the site, including a 1 million square foot building currently under construction, according to a source with knowledge of the deal.

Brookfield also made an $80 million primary commitment to Elion Real Estate Fund V, which targets logistics assets in coastal markets and closed last month on its $500 million hard-cap, the statement said.

Secondaries Investor understands that this is the first blindpool commitment Brookfield has made to an Elion fund.

The land on which the industrial park was built was acquired in 2015 by a vehicle backed by Elion’s four principals and some third-party investors. It was always Elion’s intention to bring in institutional capital once the project got to a certain size, Secondaries Investor has learned.

Brookfield is in market targeting up to $3 billion for its debut real estate secondaries fund, which would make it the second-largest pool of capital ever raised for the strategy, Secondaries Investor has reported.

In March, the firm emerged as sole backer of a process involving NorthBridge Partners’ last-mile industrial portfolio. The stapled restructuring deal, involving $360 million of gross asset value, resulted in 21 assets being moved into a continuation fund. That was its second real estate secondaries deal, SI reported.

Brookfield entered the market in July 2020, hiring Partners Group’s Fabian Neuenschwander and Marcus Day to support senior leaders in the build-out of the unit.

The previous October, Brookfield chief executive Bruce Flatt said that secondaries could grow into a $50 billion business for the firm as rising levels of exposure to alternatives made portfolio management increasingly important.

The firm is set to launch an infrastructure secondaries business in late 2021, followed by private equity secondaries, Secondaries Investor reported in May.