George Soros’ Quantum Realty Fund, the US real estate investment vehicle of Soros Fund Management, is buying $643m (£419m) of underperforming US property and loans from the US insurance and investment group Travelers Corporation.
The deal is the fund’s first since it was set up in March and Soros also revealed this week that he is making longterm plans for publicly listing Quantum’s share of its UK joint venture with British Land (see “Finance”).
After this deal the Quantum Realty Fund still has some $500m of equity to invest in the US. Commenting on the acquisition, adviser Paul Reichmann said: “It will provide Quantum Realty investors with strong current cash flow as well as the prospect of significant capital appreciation as the property market recovers later in the decade.”
Travelers has had to write 55% off the book value of the 21 office properties, 12 commercial mortgage loans, apartments, hotels and shopping centres since real estate values collapsed.
The deal with Soros marks the disposal of the first tranche of $5bn of property and loans which Travelers said last February that it wanted to sell. The company expects to have shifted $1bn of its portfolio by the year-end.
Robert Crispin, Travelers’ vice-chairman and chief investment officer, commented: “The company is taking advantage of emerging liquidity in the real estate markets. The accelerated sales programme will put significant underperforming assets back to work.”
