Carlyle Raises $4.2 Billion for Seventh U.S. Real Estate Fund

Carlyle Group LP raised $4.2 billion for its seventh U.S. real estate fund, meeting the top end of its target range, in preparation for more property purchases at a time when prices are at record levels.

The firm will expand investments in apartment buildings, along with 

its other areas of focus: warehouses, offices and retail properties in major markets, said Rob Stuckey, managing director and head of U.S. real estate. The Washington-based company also has backed senior housing, self-storage and mobile homes, along with two condominium projects on Manhattan’s west side.

Opportunity funds such as Carlyle’s seek returns of about 20 percent before fees. With real estate values climbing, it’s getting harder for investors to find bargains. U.S. commercial-property prices are 18 percent above their 2007 peak, according to an index from research firm Green Street Advisors LLC.

“We’re now seven years into the recovery and we have to be mindful of 

those risks,” Stuckey said in a telephone interview. At the same time, growth in U.S. gross domestic product points to further gains for real estate and sustained tenant demand in industries such as technology, he said.

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