Walton Street Capital Makes Progress On Fund VI

Firm: Walton Street Capital

Fund: Walton Street Capital Real Estate Fund VI

Target: $2.5 billion

Amount Raised: $221.6 million

Walton Street Capital LLC has secured $221.6 million in commitments for its sixth fund earmarked for real estate transactions, according to a regulatory filing.

The Chicago-based firm seeks a total of $2.5 billion for Walton Street Real Estate Fund VI, although the filing states that the amount is to be apportioned between related parallel funds.The firm declined to discuss the progress in its fundraising efforts. Plans for the fund were initially disclosed in November 2007. At that time, the firm reported commitments of $77.6 million in a Form D filing with the Securities and Exchange Commission.

Walton Street Capital was founded in 1994, and since that time, it has invested or committed to invest roughly $3 billion in equity in about 150 transactions in the United States and abroad, according to its Web site. The firm views real estate as “a commodity subject to cycles” and uses a number of different strategies including single asset transactions, targeted development, entity recapitalizations and private equity platform investments. Walton Street Capital has an expected average holding period of three to five years for its investments.

Walton Street Capital’s principals have personally invested roughly $202 million in its transactions, according to its Web site. Its investment and management committee consists of Neil Bluhm, Eric Mogentale, Jeffrey Quicksilver, Ira Schulman and K. Jay Weaver. Bluhm was the co-founder of JMB Realty Corp. and the rest of the group all worked with that company prior to the formation of Walton Street Capital.

Among the firm’s investments is the Scottsdale Cottonwoods Resort and Suites in Scottsdale, Ariz. That property is owned by a partnership group including Walton Street Capital, Rockpoint Group and SCS Advisors. Walton Street Capital also, according to press reports, secured a two-year, floating rate $75 million loan from Jones Lang LaSalle in early September to refinance its investment in the Four Seasons Resort Scottsdale at Troon North, which is also located in Scottsdale. The firm has staff in Mexico and India, and is reportedly at work on a $1 billion fund to make real estate investments in India. Dow Jones reported in late August that Walton Street Capital expects to close on that fund by March 2009.

The firm’s most recent fund, Walton Street Real Estate Fund V, vintage 2006, garnered $1.5 billion in capital commitments, according to Thomson Reuters data. Walton Street Real Estate Fund IV, vintage 2003, closed with $742 million in pledges.