B
enzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Brookfield Asset Management (NYSE:BAM) has raised $5.9 billion in one of its largest quarterly fundraising efforts, bringing its total war chest to $16 billion, according to The Wall Street Journal. This influx of capital comes as commercial property owners struggle with rising interest rates and lenders pressure them to sell at deep discounts. Real estate investment firms like Brookfield are turning to institutional lenders, pension funds, and endowments for funding.

    "We're buying at much lower prices than we would have a few years ago," said Lowell Baron, chief investment officer of Brookfield's real-estate group. The $16 billion haul is the largest in the company's history, with plans to raise another $2 billion before the fund closes. So far, Brookfield has invested a quarter of its fund in apartment buildings and warehouses at discounts of 20%-40% from peak prices.

    Private-equity real estate firms have seen a surge in investor interest, with $57.1 billion raised in the first quarter, up from $32.5 billion over the same period last year. Blackstone (NYSE:BX) recently closed its latest fund, BREDS V, with an $8 billion final close to buy distressed commercial real estate globally. Debt funds like those raised by Brookfield and Blackstone became more prevalent after the 2008 financial crisis, when traditional banks shied away from real estate lending. However, interest rate hikes in 2022 made it difficult for private equity to raise funds for real estate investments.