Prudential, Investors Form Fund

Prudential Real Estate Investors and a group of institutional investors formed a $685-million fund to purchase shares in real estate investment trusts and operating companies. The fund, with $350 million from eight institutional investors and $335 million from Prudential, will invest in REITs that buy real estate from Prudential. Selling the company’s “institutional-grade property creates opportunities to invest in some of the finest real estate companies in the nation,” said Bernard Winograd, chief executive of Prudential Real Estate Investors. The Parsippany, N.J.-based investment firm expects to purchase REIT shares at favorable terms. Earlier this month, it purchased $76 million in Charles E. Smith Residential Realty at $28.50 a share. The real estate investment unit, part of Prudential Insurance Co. of America, also agreed to purchase $225 million in Strategic Hotel Capital Inc., a closely held real estate operating company.