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JPMorgan Chase & Co. (JPM), the biggest U.S. bank by assets, temporarily halted raising a $750 million fund to buy distressed real estate assets, said a person familiar with the effort.
The fund, operated through a division called Junius Real Estate Partners, made an initial investment, in Salamander Resort & Spa, a 168-room hotel in Middleburg, Virginia, that’s scheduled to open in 2013, said the person, who asked not to be identified because the fundraising is private.
Investor appetite for real estate funds has declined amid slow economic growth, with $48.7 billion raised last year, about one-third the amount gathered in 2008, according to London-based Preqin Ltd., which researches private investment funds. At the same time, more fund managers are competing for capital to pursue investments following a decline in property values. There are 406 funds trying to raise more than $169 billion, Preqin said in a March 2 report.
Kristen Chambers, a spokeswoman for J.P. Morgan Asset Management, declined to comment.
The suspension in fundraising was reported earlier today by the Wall Street Journal.
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