Mesa West Capital has closed its second real estate debt fund on $614.5 million of equity – $200 million over its original target.
The Los Angeles-based firm had originally targeted between $300 million and $400 million for Mesa West Real Estate Income Fund II, and in the end garnered commitments from 25 investors, 17 of them new relationships.
Focused primarily on first mortgage debt origination in the bridge lending space, Mesa West principal Ryan Krauch told the July issue of PERE magazine that the firm's lower-risk strategy had appealed to many LPs as they sought safety within real estate. “The appeal is that our investors do not have to time the top or bottom of the market with this strategy. Investors recognise certain debt strategies can offer the safety they are looking for today with the added benefit of having high current income and an exceptional overall risk-adjusted return.”
There are an estimated 80 real estate debt funds currently raising capital from investors and targeting the whole spectrum of real estate debt acquisition and origination, including mezzanine, distressed and first mortgages.
Few debt vehicles have yet to hold final closes. However, according to people familiar with the matter, White Plains, New York-based True North Management is believed to have held a first close on its second fund, True North High Yield Investment Fund II, having secured $300 million in commitments. True North was unavailable for comment at press time, but regulatory filings show the fund was targeting $600 million in commitments and had raised $207.4 million as of April this year. The filings added that Lazard was acting as True North’s broker.