Pearlmark launches fourth debt fund

Through Pearlmark Mezzanine Realty Partners IV, the Chicago-based real estate firm is looking to raise $400 million for real estate debt opportunities in the US and Canada.

Pearlmark Real Estate Partners has launched its fourth North America-focused real estate debt fund. Although representatives from Pearlmark declined to comment, sources familiar with the matter told PERE that the firm is seeking $400 million in equity of behalf of Pearlmark Mezzanine Realty Partners IV.

The opportunistic commingled vehicle is soliciting equity commitments primarily from insurance companies, pension plans and large offshore investors. A first close is anticipated in the next four to six months, with a final close expected sometime within the year. 

Through Fund IV, Pearlmark is looking to invest in all debt opportunities in the US and Canada, primarily in the office, industrial, retail and multifamily sectors, although it occasionally will seek out opportunities in the hotel, student housing, senior housing and medical housing sectors as well. The Chicago-based real estate investment firm will target the region’s top 15 markets, although it will be mindful of any investment opportunities throughout the US and Canada that coincide with Fund IV’s investment strategy. 

One source told PERE that Pearlmark launched its latest vehicle in the series in part because it has been seeing increased demand for bridge, gap and acquisition financing. In addition, the debt space is the area in which the firm has been most active in the past three years. 

Fund IV continues the same strategy as Fund III, which closed on $427 million in commitments in 2007. Investments on behalf of Fund III, which became fully invested in 2011, include a $34 million mezzanine loan for the Plaza Hotel in New York, a $12 million loan for an office property located at 6300 Wilshire Boulevard in Los Angeles, a mezzanine loan for the new Four Seasons Hotel Toronto and 10 multifamily mezzanine loans around the US.  

Formed in 1996 and led by chief executive Stephen Quazzo, Pearlmark formerly was known as Transwestern Investment, the investment arm of Houston-based realty firm Transwestern. The firm spun out on its own and changed its name to Pearlmark in 2011.