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The Journal reports the fund would aim to generate returns of over 20% by taking advantage of distress in the real estate market, focusing on the New York and Washington areas. Already, there's plenty of supply out there. On Monday, Deutsche Bank AG (NYSE:DB) sold its office property WorldWide Plaza in Manhattan for $605 million. The German bank took possession of the property after Macklowe Properties was unable to pay its mortgage. According to Real Capital Analytics, the office was acquired during the height of the real estate boom in 2007 for $1.74 billion by developer Harry Macklowe. Vornado is no stranger to distressed real estate investing. The New York REIT acquired bankrupt retailer Alexander's in the early 1990s, which has sowed the seeds for the building of the Bloomberg LP headquarters on that site. Additionally, it has even dabbled in traditional private equity when in 2004 it participated in the $7 billion buyout of Toys 'R' Us Inc. with private equity firms Kohlberg Kravis Roberts & Co. and Bain Capital. Meanwhile, Vornado joins a growing field of PE real estate funds that seeks to raise $253 billion in 2009, of which $92.5 billion, or 37%, will be invested in distressed real estate and debt, according to a February study by research and consultancy group Preqin.- Gerald Magpily See story about Vornado from The Wall Street Journal
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When it comes to investing, especially in real estate, the conventional wisdom is the best time to get in is at the bottom. And with interest-only 
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