Q1 fundraising shows strong momentum in RE debt

The quarter saw the close of four $1bn-plus mezzanine/debt funds, which accounted for a bulk of the capital raised during this period.

The first quarter of 2022 saw investors’ growing interest in real estate debt and the hospitality sector, according to PERE’s Q1 2022 fundraising report.

Mezzanine/debt was crowned the top fundraising strategy in Q1 2022, taking up 34 percent of the total capital raised. According to PERE data, four of the top five private real estate-focused funds closed in Q1 2022 were focused on mezzanine/debt investments. They include the $3 billion Oaktree Real Estate Debt Fund III, the $2.1 billion Madison Realty Capital Debt Fund V, the $2 billion Silverstein Capital Partners Fund and the $1.7 billion Pretium Residential Credit Fund II. By comparison, the report showed opportunistic strategy dropped from the top place to becoming the third-most popular behind value-added strategy.

Meanwhile, hospitality overtook office to become the third-most popular strategy, claiming 15 percent of the total capital raised for sector-specific vehicles in Q1 2022. In addition to those two property types, multifamily, logistics, student housing and healthcare also contributed to the sector-specific fundraising volume during the quarter. This represented a significant change from the same period last year, when all 16 vehicles dedicated to a specific property type targeted only one of three sectors: multifamily, logistics and office.

Check out our interactive report for a more extensive analysis of PERE’s Q1 2022 fundraising figures, including the quarter’s most popular strategies, top capital-raising regions, 10 largest fund closes and more.

Download the data here.