Travelers-Tishman Speyer venture closes with over $800M in capital

Real Estate Weekly, Nov 19, 1997

The equity committed by Travelers and Tishman Speyer represents the largest to date for a private venture of this kind investing in real estate opportunities, and all of the new real estate development and investment activities of Tishman Speyer will be channeled through this vehicle.

Travelers and Tishman Speyer will be general partners in the venture, which will be the first of its kind to blend institutional and private equity sponsorship, and focus on global real estate acquisitions and development opportunities. The partners anticipate that the venture's total capitalization could grow to $3 billion after an initial three-year investment period.

The venture begins with a portfolio of 15 domestic office properties and five domestic development sites contributed by affiliates of Travelers and Tishman Speyer. Travelers is providing $420 million in real estate equity and $100 million in cash; and Tishman Speyer is committing $280 million in properties and cash. Both companies will serve as asset managers for the venture, and Tishman Speyer will spearhead the venture's real estate acquisition and development efforts.

Sanford I. Weill, chairman of the board and CEO of Travelers Group, said "This venture is a unique marriage of private developer/entrepreneur and institutional capital, and we believe that our performance will benefit from the cumulative investment, management, and development expertise of the Travelers and Tishman Speyer organizations. As one of the most successful development companies in the global arena, Tishman Speyer is an ideal partner for us, and we look forward to building an excellent business that maximizes the values of the properties already in our portfolio and the new properties in which we will invest."

Jerry I. Speyer, president of Tishman Speyer Properties, said "The global real estate market today offers very attractive investment opportunities. This unique venture, with its blend of institutional and private resources, its strong capital base, its domestic and international real estate expertise and its fine initial portfolio of domestic properties, has the means to build substantial value for both investors and the communities in which its properties are located. We look forward to working with the great team at Travelers to build and manage a diversified global real estate portfolio capable of achieving our financial objectives."

Travelers Group is one of the nation's largest diversified financial services companies, with approximately $170 billion in assets.