Investment group

SoftBank considering sale of Fortress Investment Group

Masayoshi Son, founder of SoftBank, Peter Briger, director of Fortress Investment Group (Wikipedia, Long Arc Capital, Getty)

After suffering a record quarterly loss, SoftBank is considering the sale of a major player in US real estate.

Masayoshi Son’s company has begun discussions about selling Fortress Investment Group, Bloomberg reported. Son disclosed the talks on Monday, the same day SoftBank announced a net loss of $23.4 billion.

Son did not mention any specific partners for discussions regarding Fortress, a major real estate player. Last month, however, Bloomberg reported that Abu Dhabi’s sovereign wealth fund Mubadala was in talks for a deal that would value Fortress at more than $1 billion.

SoftBank announced its acquisition of Fortress, one of New York’s most active real estate lenders, in February 2017. The deal was for $8.08 per share, or $3.3 billion in total.

The acquisition was intended to bring more in-house investment talent to SoftBank. Fortress was founded in 1998 and went public in 2007 with a $634.3 million IPO, starting at $18.50 per share.

In the fourth quarter, Fortress had $53.3 billion in assets under management, including real estate and other private equity assets worth $34.5 billion. He became a household name in New York real estate in the late 2000s when he financed Harry Macklowe’s disastrous purchase of the Equity Office portfolio. Fortress also served as a rescue lender for Kent Swig, as detailed in The real deal new book, “The New Kings of New York”.

Last month, Fortress flipped industrial property it had bought just six months earlier for a $10 million bounty. The 50,000 square foot building in Moreno Valley, Calif., was sold for $29.3 million to Bridge Investment Group.

Last June through February, Fortress spent at least $259 million on small industrial sites across the Inland Empire.

The past few years have not been kind to SoftBank, which was beaten with the implosion of WeWork in 2019 and again with the fall of global tech stocks. The company was recently forced to write down the value of companies in its portfolio, including Coupang and SenseTime.

SoftBank has also lost talent. This year, WeWork chief operating officer and executive chairman Marcelo Claure left the investment group over a disagreement over compensation.

—Holden Walter-Warner