A real estate investment fund aimed at distressed assets located in urban areas of the United States has been started by two veteran investors. Michael Ashner and Steve Witkoff have announced that they have come together once again to start up the new $150 million real estate fund. The partners have announced that their partnership is aimed at making investments in major urban areas in America, including New York City. The Ashner and Witkoff partnership have already made their first acuqistion. They have purchased a $75 million loan that is associated with a $75 million mezzanine tied to a hotel project located at 1568 Broadway in New York City.
This new partnership is not the first one between Michael Ashner and Steve Witkoff. The duo teamed up with other investors in the acquistion of a $1 billion hotel being finished at 20 Times Square. The partnership are also activist shareholders in New York REIT. With that purchase the group is looking to install a new chief executive and are also working on liquidating the trouble assets and holdings of the firm.
‘As we were working through 20 Times Square, which was a very complicated project, Michael and I became very close friends. I am at the point in my career where I want to work with people like Michael who are smart and great partners’ said Witkoff.
Ashner and Witkoff both individually are investing $25 million into the fund. Anchor investors have been brought in and they are Sequoia, Soros Fund Management, and Baupost. The fund is geared to allow investors to add another $1.5 billion into the fund which will hopefully allow for the partnership to take on more projects.
Ashner says that in the end that the partnership will be one where they will still have some kind of liquidity in the acquisitions and deals that it will make.
‘The fund will retain at least a 10 percent ownership interest in the acquistions that it makes. In the end, it will still give the anchor investors the opportunity and chance to be able to make investments and acquistions and specific deals that are to their liking’ says Ashner.
Ashner and Witkoff both state that the fund will host and consider a variety host of distressed deals. These would include such things as loan acquistions, underperforming real estate assets and development projects that are not meeting expectations. In the end, Ashner sees the partnership with Witkoff being one that could be very successful.
‘Steve has all of the expertise when it comes to development. That was a skill set in which I lacked. Together, I believe that we will compliment each other very well’ said Ashner.
Michael Ashner has been associated in the wealth management and acquistions market for nearly 40 years and has a huge presence in New York City. Steve Witkoff is the founder of The Witkoff Group and is a well known and respected real estate investor and landlord in New York City. One of his early clients was the President of the United States in Donald Trump.