Heitman has captured $110 million in the first close of its inaugural real estate mezzanine debt fund, Heitman Real Estate Debt Partners, according to a filing with the US Securities and Exchange Commission. With this fundraising, the firm is almost halfway to reaching its $250 million equity target for the vehicle, which has a hard cap of $350 million.
Heitman, which officially launched the vehicle at the end of last year, declined to comment. However, PERE understands that the firm is aiming for a sizable subsequent close in February or March of next year, with a final close anticipated in the summer. Limited partners in the first close include Tennessee’s Nashville & Davidson County Metropolitan Employees’ Benefit Trust Fund, which committed $30 million to the fund last month.
Heitman Real Estate Debt Partners is intended for clients “who seek investments in short- and immediate-term financing for high-quality real estate operators and developers in the United States,” according to the company’s website. The fund, which has a two-year investment period beginning with the first close, has not made any investments to date.
Heitman established its real estate debt business in 2007, with the hire of senior managing directors Greg Leadholm and Steve Bailey. The pair co-lead Heitman’s real estate debt team, which structures, originates and services senior and mezzanine debt opportunities across property types on behalf of clients that include insurance companies, pension plans and investment banks.
Leadholm and Bailey also act as co-portfolio managers for two large debt separate accounts totaling more than $1 billion in capital. As of June 30, 2013, the firm managed approximately $200 million across three real estate debt separate accounts for the State of Wisconsin Investment Board, according to the pension plan’s website.