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Joint venture to target distressed assets

Two investment firms are collaborating with Cushman & Wakefield to form a new real estate venture. Goldman Sachs’ Whitehall Funds and Sienna Capital LLC announced a joint agreement with the New York-based real estate services firm last week, in which Sienna will pursue the acquisition of CBD office properties. Instead of seeking the market’s strongest buildings, Sienna will target large, value-impaired assets.

By joining with Whitehall — the world’s largest private equity real estate funds — Sienna will have plenty of capital, equity and debt available. "Goldman Sachs is a capital machine, and Cushman & Wakefield is in every market we want to be in. This is a very unique idea," says Tom Falus, president of Cushman & Wakefield’s strategic ventures group.

Sienna will acquire, manage, redevelop and operate real estate assets with a focus on restructuring or repositioning the properties. The initial focus will be on New York City, Boston and Washington D.C.

Cushman & Wakefield will provide advisory and brokerage capabilities and will handle the leasing, management and sales for the venture’s worldwide properties. According to Falus, Cushman & Wakefield will have no fiduciary rights in the venture. "Whitehall has been on of our most important clients for a long time. Now, Cushman & Wakefield will provide even more services to Whitehall and Sienna Capital and create additional service fee business," says Arthur Mirante II, president and CEO of Cushman & Wakefield.

Falus will remain with the firm until the venture has acquired its first investment property, at which point he will be come CEO. He will then join another Canadian, Michael Dennis, at the firm. Dennis is now the chairman of Sienna. Both Falus and Dennis worked for Olympia & York, builder of the World Financial Center.

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