Mesa West has raised $390 million towards a $750 million target for its latest debt fund, Mesa West Real Estate Income Fund IV, PERE sister publication Real Estate Capital has learned based on documents filed with the US Securities and Exchange Commission.
The firm closed its previous fund, Mesa West Real Estate Income Fund III, with $752 million in commitments in November of 2013. The previous fund closed with $614.5 million in commitments in April 2010. Both were substantially oversubscribed.
Fund III targeted 12 percent net returns and was backed by investors including Texas Permanent School Fund, Los Angeles City Employees Retirement System (LACERS), Hawaii Employees’ Retirement System and the San Diego City Employees’ Retirement System. Most of those invested in the previous fund.
Mesa West is best known as a so-called transitional real estate lender, and one of the largest behind giants Blackstone Group and Starwood Property Trust.
In a representative deal supporting that strategy, in May the company provided New York-based Angelo Gordon & Co. and Virginia-based Atlantic Realty Companies with two five-year loans totaling $78.9m for the acquisition and stabilization of four-office buildings in Reston, Virginia.
At the time occupancy, at least one of the buildings was as low as 38 percent, so a portion of the loan was reserved for capital improvements aimed at spurring additional lease-up.
The new fund will maintain a similar investment strategy, sources said.