REPE Definition

Question

Is any firm that is private and invests in RE on behalf of outside investors considered REPE? If not, when is a company distinguished as a REPE shop?

AB84 · Accepted Answer

Touchy subject, but here's my take:

LP investors = "REPE" (real estate private equity) or "PERE (private equity real estate) or "Real Estate Fund"
Company names are typically "____ Capital" or "____ Management"

GP investors = "Operator" or "Sponsor" or "Real Estate Investment Company" or "Syndicator"
Company names are typically "____ Partners" or "____ Property Group"

AB84 · Answer

Firms like Blackstone that take both the LP and GP approach would be - well - considered both REPE and an Operator... it doesn't have to be complicated.

Trunk Yeti · Answer

I agree with you on that composition of the investor base doesn't impact whether the firm is REPE or not.  There are plenty of firms out there that have programmatic JV relationships with someone like CalSTRS.

Where we disagree is classifying REPE based on investment style.  In my opinion, it doesn't matter if the fund is making LP investments or if it is acquiring property directly.  If a firm sponsors a Reg D 506(b) fund, then by definition it is REPE as it has raised a real estate private equity fund.

Beers · Answer

I think this is the key distinction. A REPE firm raises a pool of capital dedicated to an explicit strategy (can be broad or narrow) and executes the strategy on behalf of the fund investors. This is in contrast public REITs or RE companies raising capital on the public markets, syndicators and operators raising capital on a per-deal basis, or developers funding a project with debt, refinancing once stabilized, and holding the asset.

Put differently, REPE firms deploy privately-raised capital that was sourced above the property-level, in accordance to some type of strategy or guidelines.

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REPE Definition

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REPE Definition

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