Related Companies Announces $1.4 Billion Equity and Debt Investment by Elite Consortium

Investment by Goldman Sachs, MSD Capital, Mubadala Development and Olayan

Group Will Support Future Growth and Provide Access to Vast Capital


Dec 17, 2007, 00:00 ET from Related Companies

    NEW YORK, Dec. 17 /PRNewswire/ -- Related Companies, one of the
 nation's leading private real estate development firms, today announced a
 nearly $1.4 billion equity and debt investment, the first outside
 investment in the company. Goldman Sachs and MSD Capital, LP have purchased
 equity stakes in Related totaling 7.5 percent. Three international entities
 will also invest through a debt placement, including an affiliate of
 Mubadala Development Company and The Olayan Group.
     In addition to the corporate investment, each investor will co-invest
 in future development opportunities undertaken by Related. This elite group
 of investors has been specifically selected to fund future growth. The
 minority investment in Related includes no involvement in the governance of
 the company and there will be no change in Related's management structure.
     "This is a historic transaction for Related which will enable us to
 write a new chapter of our growth. This carefully-selected, prestigious
 group of investors will allow us to reinforce our position as one of the
 nation's leading developers, managers and financiers of premier real estate
 properties," said Related Chairman and CEO Stephen M. Ross. "In the last
 decade, the size, scope and geographic diversity of Related's development
 pipeline has increased dramatically with Time Warner Center and Moynihan
 Station in New York City, Grand Avenue in downtown Los Angeles, CityPlace
 in West Palm Beach, CityNorth in Phoenix and Snowmass Village in Colorado.
 As the industry continues to move toward bigger, more complicated
 development transactions, these new financial partnerships ensure that
 Related has a ready and deep source of capital to take advantage of
 virtually any opportunity regardless of size or scale."
     Related President Jeff T. Blau said, "This access to new capital offers
 Related a tremendous competitive advantage. We are currently involved in
 some of the most ambitious real estate developments in the nation and are
 competing for a once-in-a-lifetime opportunity-to create a 26-acre, vibrant
 mixed-use waterfront neighborhood at the West Side Yards in New York City.
 This investment into our company is more than a financial arrangement.
 These long- term relationships will provide us with the financial
 flexibility to capitalize quickly on even the most challenging future
 opportunities. Above all else this show of confidence from the world's most
 elite investors is a testament to the strength of our team-a group of the
 brightest and most innovative and skilled employees, who are truly the best
 in the industry."
     Related's current pipeline is comprised of marquee projects across the
 nation including: Grand Avenue, a multi-phase 3.6 million square foot, $3
 billion development spanning three city blocks in downtown Los Angeles,
 California; the $3 billion, 80-acre Snowmass Village Resort development in
 Colorado; the 144-acre CityNorth mixed-use development in Phoenix, Arizona;
 and the development of the 7.5 million square foot Moynihan Station complex
 in New York City.
     Stuart Rothenberg, Global Head of Real Estate Principal Investments at
 Goldman Sachs, said, "We're excited to make a strategic investment with a
 best-in-class developer and highly skilled management team. Related has a
 history of creating value and has developed some of the country's most
 financially successful projects."
     Barry A. Sholem, Partner responsible for MSD Capital's Real Estate
 Group, said, "MSD Capital is pleased to make this equity investment in
 Related, which is led by one of the strongest management teams in the
 business. Related is developing some of the most exciting projects in the
 country, and we look forward to growing our partnership with them over the
 long term."
     Khaldoon Khalifa Al Mubarak, Mubadala CEO and Managing Director, said,
 "Related is a strong fit for Mubadala. We share their approach to investing
 in premier projects that build long-term value. Related has great
 leadership and an impressive project pipeline with even more potential
     Anthony S. Fusco, The Olayan Group's U.S. vice president for real
 estate, said, "This investment continues our organization's strategy of
 creating long- term alliances in all of our lines of business with strong,
 qualified, strategic partners. As a top developer and property manager in
 the U.S. market, Related certainly fulfills that role."
     Related was advised by a team that included Goldman Sachs, Deutsche
 Bank and Eastdil Secured.
     About Related Companies:
     Heralded as one of the most prolific and visionary developers in the
 country, Related Companies was formed over thirty-five years ago. Today
 Related is considered the most prominent privately owned real estate
 development firm in the United States, headquartered in New York City with
 divisions in development, acquisitions, property management, marketing and
 sales. In 2004, Related completed the development of New York City's newest
 landmark, Time Warner Center. Related has offices and major developments in
 Miami, Los Angeles, San Francisco, Chicago and Boston and boasts a team of
 more than 2,000 professionals. To date, Related has real estate assets
 worth over $15 billion with another $9 billion currently in development. In
 Los Angeles, Related is expanding its portfolio with The Century, a
 super-luxury condominium in Century City and the Frank Gehry-designed Grand
 Avenue development, situated directly across from the beloved Walt Disney
 Concert Hall, which will include luxury residences, retail, notable
 restaurants and a world class hotel.
     Related is staunchly committed to sustainable design with over $6
 billion in green development underway or completed. The firm developed one
 of the first green residential buildings in the nation, Tribeca Green in
 Battery Park City, New York and Chicago's first green residential building,
 340 on the Park. Related is currently developing eight new LEED-certified
 residential buildings, The Brompton, The Harrison, and Superior Ink in New
 York City, The Clarendon in Boston, The Century in Los Angeles, The Village
 in Santa Monica, Canyon Ranch Living and The Peshtigo in Chicago as well as
 Bronx Terminal Market, a one million square foot retail development in
 Bronx, New York. Related serves on the board of directors of the World
 Resources Institute.
     Earlier this year Related acquired a majority stake in Virgin
 Megastores North America and this past year acquired Equinox(R) Fitness
 Clubs, further expanding the company's capabilities into the health and
 fitness arena and enhancing the value of its properties by incorporating an
 exclusive, branded amenity into the lifestyle offering. The company is also
 the largest shareholder in Centerline, the leading financier of affordable
 housing in the country. For more information about Related Companies please
     About Goldman Sachs:
     Goldman Sachs is a leading global investment banking, securities and
 investment management firm that provides a wide range of services worldwide
 to a substantial and diversified client base that includes corporations,
 financial institutions, governments and high net worth individuals. Founded
 in 1869, it is one of the oldest and largest investment banking firms. The
 firm is headquartered in New York and maintains offices in London,
 Frankfurt, Tokyo, Hong Kong and other major financial centers around the
 world. For more information, visit
     About MSD Capital, L.P.:
     MSD Capital was formed in 1998 to exclusively manage the capital of
 Michael S. Dell and his family. The firm currently manages in excess of $12
 billion in assets and participates in a broad range of investment
 activities, with its primary focus on investing in publicly-traded
 securities, real estate and traditional private equity. For more
 information, visit
     About Mubadala Development Company:
     Mubadala is an investment and development company headquartered in Abu
 Dhabi, the capital of the United Arab Emirates. Wholly-owned by the Abu
 Dhabi Government, Mubadala's mission is to create and maximize long-term
 returns as an engaged investor in high-performing businesses and promising
 new ventures. The company has a growing and multifaceted international
 portfolio, with significant interests in sectors such as energy,
 telecommunications, infrastructure, real estates and aerospace. For more
 information, visit
     About The Olayan Group:
     Founded in 1947, The Olayan Group is a private, multinational
 enterprise that is both a leading diversified business in Saudi Arabia and
 a major investor internationally. The group comprises some 50 companies and
 affiliated businesses engaged in product distribution, manufacturing,
 services and investment. It has offices in New York, London, Athens,
 Vienna, Riyadh, Al-Khobar and Jeddah. For more information, visit

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