Wednesday December 3, 07:48 AM
Goldman Whitehall funds hit by property slump-WSJ
Dec 3 (Reuters) - Goldman Sachs Group Inc's Whitehall family of real estate investment funds has been hit by the property downturn and could post big losses on some investments made at the market peak, the Wall Street Journal said.
Whitehall, best known for buying New York's Rockefeller Center in 1996, has marked the equity value of the $4.8 billion Whitehall 2007 fund to about 50 cents on the dollar, the paper said, citing people familiar with the matter.
The funds will likely struggle to make a profit on deals such as its purchase of the Stratosphere, a Las Vegas casino, in 2008 and a string of hotel deals in the past two years.
The Whitehall funds have invested in a Manhattan development site and numerous other properties that have all likely dropped in value as prices for commercial real estate have fallen, according to the paper.
The problems in Whitehall reflect those in Goldman, which is on track to lose about $2 billion in its fiscal fourth quarter, the paper said.
Also, some of Goldman's writedowns will come from its investments in real estate, according to the paper.
'We do not believe that the firm's transition to a bank-holding company will have an impact on the firm's strategy, including our real-estate activity,' a bank spokeswoman told the paper.
Goldman could not be immediately reached for a comment by Reuters.
(Reporting by Sakthi Prasad in Bangalore; Editing by David Cowell) Keywords: GOLDMANSACHS/WHITEHALL
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