AECOM, Canyon Partners Close $500M Fund

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A joint venture between AECOM Capital and Canyon Partners announced the final close of its fund, AECOM-Canyon Partners, with a little more than $500 million in total equity commitments. The two firms joined forces as experts in development and investment. AECOM Capital is the investments adviser of global infrastructure firm AECOM, while Canyon Partners is an alternative asset management firm with more than $25 billion in assets under management.

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The fund is targeting build-to-core investments in the top 25 markets in the U.S. across a range of property types, including multifamily, mixed-use, office, hospitality, industrial and student housing. AECOM-Canyon Partners intends to provide joint equity across more than $4 billion in assets in partnerships with development firms. In addition to providing capital, the joint venture will also look to provide services like design, construction management and engineering.

So far, the platform has invested in markets in the Northeast and in California, with notable projects including a 519,000-square-foot mixed-use development in Culver City, Calif., dubbed Ivy Station. TV network HBO has already signed on for all 240,000 square feet of the office space at the project. In Washington, D.C., the fund has invested in Union Place, a 525-unit luxury community that has already begun leasing. In Menlo Park, Calif., the partnership has invested in a 250-key hotel near Facebook’s headquarters.

Rise of the mega funds

Over the past several months, there has been a surge in the formation of mega funds in the real estate sector. Last month, Blackstone closed its largest fund ever raised, Blackstone Real Estate Partners IX, at $20.5 billion. The number surpassed the firm’s previously largest fund, which closed at $16.4 billion.

In August, Chicago-based Harrison Street closed Harrison Street Real Estate Partners VII LP at $1.3 billion, exceeding its original goal of $950 million. The investment management firm said at the time that half of the investment vehicle’s final portfolio will consist of senior housing, health-care delivery and life science assets.