LOS ANGELES – Mesa West Capital has successfully closed its Mesa West Real Estate Income Fund III, LP with $752 million in equity commitments, announced Principal Ryan Krauch.
With a target of $650 million, Mesa West Capital has now exceeded its fund raising goal for the second time in the last three years. In April 2010, Los Angeles-based Mesa West Capital, one of the first debt fund managers to focus exclusively on commercial real estate debt only platforms, closed Mesa West Real Estate Income Fund II, LP with $614.5 million of equity commitments, well over its $400 million target.
“We have benefited from the fact that pension funds, endowments, foundations and off-shore investors have increasingly prioritized cash flow and safety in this challenging fundraising environment,” said Krauch, who oversees the firm’s marketing efforts. “As real estate debt continues to find a permanent home in the allocations of many institutional investors, our track record and focus certainly has played a role in in the success of our fundraising efforts.”
According to a recent study by Preqin, institutional interest in real estate debt has grown from 8% in December 2011, to 23% in August 2013.
Since its founding in 2004, Mesa West Capital has originated more than $4.0 billion in non-recourse first mortgage debt for the acquisition, refinancing and recapitalization of transitional institutional quality commercial real estate assets throughout the United States. Mesa West also provides lower leverage first mortgage loans up to $250 million on more stabilized core assets through its recently launched open-ended Mesa West Core Lending Fund. This originate-and-hold strategy differentiates Mesa West from other debt funds, which tend to focus on mezzanine, distressed debt, or CMBS trading strategies, according to Mesa West Co-Chief Executive Officer Jeff Friedman.
“Despite the easing of the capital markets, there remains an approximate $2 trillion funding gap between the amount of commercial real estate debt maturing over the next several years and the available capital to refinance that debt,” said Friedman. “There are tremendous opportunities for us as a lender to provide moderate leverage loans through both of our platforms on assets in solid infill locations with strong sponsorship.”
"While not the sexiest strategy, it has proven to help investors meet their actuarial yield requirements with the least amount of risk possible,” added Co-Chief Executive Officer Mark Zytko.
About Mesa West Capital, LLC
Los Angeles-based Mesa West Capital (www.mesawestcapital.com) is a privately held portfolio lender with a current capital base of approximately $3.5 billion. Mesa West has an established debt platform that continues to provide flexible and reliable capital for real estate acquisitions, re-financings and re-capitalizations on office, retail, industrial, multifamily and hotels in the United States.