Cottonwood Group Closes $1B Fund for US Distressed Real Estate

Cottonwood Group has successfully closed a $1 billion fund focused on special situations in the U.S. real estate market, doubling its original $500 million target amid a challenging fundraising environment. The fund targets distressed assets, refinancing opportunities, new developments, and properties needing financial restructuring, with roughly $300 million already invested primarily through loans that include options to acquire properties in default scenarios. Founder and CEO Alexander Shing highlighted the fund's 20% internal rate of return and emphasized the opportunity presented by approximately $2 trillion in commercial real estate debt maturing by 2027, including nearly $600 billion potentially troubled. The fund’s portfolio includes high-profile investments such as a residential tower at 262 Fifth Avenue in Manhattan, a mixed-use development in Austin, and the redevelopment of the Viper Room site in West Hollywood. Institutional investors from the U.S. and abroad, including Taiwan’s Fubon Financial Holding and Korea Investment Holdings, contributed to the fund, reflecting confidence in Cottonwood’s ability to navigate market cycles and unlock value. Additionally, Cottonwood expanded its multifamily portfolio by 20% through a merger with RealSource Properties, strengthening its platform for growth and diversification.