AllianceBernstein has closed its second commercial real estate debt fund on $1.55 billion, double the size of its predecessor vehicle, the firm said Wednesday.
The New York-based investment management firm launched AB Commercial Real Estate Debt Series II nine months ago with a $1 billion target. Its investor base included global insurers, pensions and foundations, according to the firm. AB’s prior fund in the series closed in 2013 at $750 million.
AB said it will continue the same strategy for the most recent vehicle as its predecessor, originating and purchasing senior whole loans ranging from $15 million to $125 million. These loans are secured by transitional commercial real estate assets across the US, with diversification in geography and property type. The firm holds these loans on an unleveraged basis, seeking to generate stable and diversified sources of floating rate income. AB targets loan-to-value ratios of 65 percent to 75 percent, according to Wednesday’s statement.
“We think the risk-adjusted returns in transitional US commercial real estate debt, particularly when accessed through an unleveraged model, are very attractive,” said Roger Cozzi, AB’s chief investment officer of commercial real estate debt, in the statement.
In June, PERE reported that AB closed its latest private equity real estate fund, AllianceBernstein US Real Estate Partners (ABREP) II, on $1.2 billion, exceeding an original $1 billion target. The fund attracted nearly the double capital of its predecessor, ABREP I, which collected $680 million in 2012.
The firm’s property business, which was launched in 2009, now has more than $5 billion of assets under management, split between equity and debt.