Northcap, a West Palm Beach, Florida-based real estate private equity firm, this week launched a $750 million real estate debt fund.
The firm launched the fund in response to what it sees as an opportunity to gain market share as regional and national banks are scaling back their financing for commercial real estate projects, said Michael Reynoso, managing principal.
Additionally, the firm’s analysis was driven by near-term commercial real estate maturities of $728 billion in 2023 and $659 billion in 2024, per MSCI Real Assets data. Northcap believes there will be about $900 billion of demand for new loans to refinance existing loans and finance new projects.
“We understand the importance of liquidity in enabling developers to seize opportunities and navigate market challenges,” Reynoso said.
The fund will provide financing to sponsors for acquisitions, refinancings and construction projects and will focus on what the firm believes are high-quality assets with strong cashflow potential.
Recent launches
Real Estate Capital USA has tracked two other launches or closings over the past week, with Benefit Street Partners rolling out its second opportunistic debt fund while Calmwater Capital closed its fourth credit fund.
New York-based Benefit Street Partners, the credit-focused alternative asset management arm of Franklin Templeton, filed initial documents for Benefit Street Partners Real Estate Opportunistic Debt Fund II on July 5. The firm did not disclose a target size for the fund at the time of publication and declined to comment beyond confirming the strategy’s launch.
BSP has remained an active lender through the recent market volatility that has sidelined some national and regional banks. As a result, the firm is seeing more opportunities to lend on industrial construction and multifamily construction deals compared with quarters past.
The firm typically focuses its lending activity on floating and fixed-rate loans across all property types with the present exception of large to mid-sized office transactions. BSP’s first opportunistic debt strategy closed in 2022 with $518 million in capital commitments.
Meanwhile, Calmwater Capital raised $372 million for Calmwater Real Estate Credit Fund IV and a series of related investment vehicles. The firm, which focuses solely on senior secured commercial real estate bridge lending, raised capital from domestic and international pension funds, endowments, family offices and ultra-high-net-worth individuals.
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