Brasa Raises $582M Despite Falling Short of Target

Brasa Capital Management has raised $582 million after closing its third real estate fund. While the figure missed its initial fund target of $750 million, it still plans to deploy the capital on both residential and industrial properties, according to a report from Private Equity Real Estate.

Eric Samek, founder and managing director of Brasa, admitted to the magazine that fundraising has been more difficult, as interest rates remain elevated.

The fund received $100 million in commitments from the Teachers’ Retirement System of the State of Illinois. To add to that, more than 50 percent of the investments came from public pensions. Also, emerging manager programs from the New York State Common Retirement Fund and GCM Grosvenor, drove some traction.

Roughly two thirds of the proceeds will be deployed in the residential and industrial sector on the West Coast and Texas, with another 15 percent targeting distressed properties in those asset classes. Usually, Brasa targets mid-market deals that range from $10 million to $40 million. Plus, the latest fund is seeking a net return on investment that ranges from 13 to 15 percent.

While the latest proceeds fell short of Brasa's goals, it represents the highest amount that the Los Angeles-based firm has raised on record with real estate funds. The investment firm has raked in at least $450 million and $430 million, respectively, from its last two previous real estate funds.

In addition to residential and industrial, Brasa invests in retail and office assets, within the Western and Texas markets.

In 2024, investors continued to shy away from committing capital. In fact, just $80 billion of aggregate capital was brought in through North American fundraising — marking the lowest figure since 2016 and the third straight year of declines, according to a report from Colliers research director Aaron Jodka. While investors have been waiting to see signs of a bottom market, core funding, which hit an all-time high of $9.5 billion in 2024, was the one bright spot.