Brasa Capital Management has secured $582 million for its third real estate fund, falling short of its initial $750 million target. Despite missing the goal, the firm intends to allocate the capital across residential and industrial properties, according to Private Equity Real Estate.
Eric Samek, founder and managing director of Brasa, acknowledged that fundraising has been increasingly difficult due to elevated interest rates.
The Teachers’ Retirement System of the State of Illinois contributed $100 million to the fund. Additionally, over half of the total commitments came from public pension funds. Support from emerging manager programs at the New York State Common Retirement Fund and GCM Grosvenor also played a role in attracting investments.
Approximately two-thirds of the funds will be deployed in residential and industrial sectors across the West Coast and Texas. Another 15% is earmarked for distressed assets within these categories. Brasa typically targets mid-market deals ranging between $10 million and $40 million. The latest fund aims for a net return of 13% to 15%.
Despite falling short of the initial target, this fund represents the highest capital raise in the Los Angeles-based firm’s history. The firm previously secured $450 million and $430 million in its last two real estate funds.
Beyond residential and industrial properties, Brasa also invests in retail and office assets within the Western U.S. and Texas.
Investor reluctance to commit capital has persisted in 2024. Total North American fundraising amounted to just $80 billion, the lowest level since 2016 and marking a third consecutive year of decline, according to Colliers research director Aaron Jodka. However, core funding remained a bright spot, reaching an all-time high of $9.5 billion in 2024, signaling selective investor confidence in specific segments of the market.
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By Ravi Kumar
