Asia Capital Real Estate, a real estate private equity firm, has closed its debut credit fund at over $325 million, beating its $300 million target. The fund will provide mortgage bridge loans, mezzanine loans and equity to multifamily owner-operators.
NEW YORK CITY – July 27, 2020 – Asia Capital Real Estate (ACRE), a global real estate private equity firm that manages capital for institutional and family office investors, today announced the close of its fourth fund, ACRE Credit I.
ACRE launched the fundraising process in Q1 2020 and ultimately raised over $325 million of commitments, well in excess of its $300 million target. The Fund was well received by institutional investors that are focused on stability and potential upside in the uncertain economic climate.
ACRE Credit I provides first mortgage bridge loans, mezzanine loans and preferred equity to best-in-class multifamily owner-operators secured by institutional grade real estate across the U.S. In a low-yield environment, the Fund is intended to generate double-digit interest rates and target IRRs in the low- to mid-teens. Baird acted as financial advisor for many of the Fund’s largest commitments, including those from institutional investment managers Almanac Realty Investors and OPTrust. Almanac Realty Investors, the private real estate investment arm of Neuberger Berman, made a $320 million capital commitment to various funds managed by ACRE at the beginning of the year. A large percentage of Almanac’s commitment was allocated to ACRE Credit I, a testament to ACRE’s lending platform and its proven track record.
“The success of our first direct lending fund comes as a result of ACRE’s widely recognized ability to understand the market and identify opportunities to deploy capital into credit investments secured by strong, incoming-producing multifamily assets,” said ACRE Founding Partner Les Menkes. “Thanks to our demonstrated track record of success, this vehicle has been able to secure significant commitments from many prominent institutional real estate investors, giving us the ability to operate conservatively and offer a high degree of principal protection while preserving the potential for significant returns.”
To date, ACRE Credit I has raised more than $325 million of equity since its launch and has since closed and committed to provide more than $700 million whole loans across 17 transactions. These loans are meant to support the acquisition, lease-up, redevelopment and recapitalization of multifamily assets in growing secondary markets such as Miami, Fla.; Durham, N.C.; Cincinnati, Ohio; Orlando, Fla., Charleston, S.C.; and Dallas, Texas.
The fund attracted investors seeking a vehicle to store their capital and that provides predictable asset-backed yield while avoiding exposure to areas of the real estate market that have been adversely affected by the COVID-19 pandemic, such as retail and hospitality.
As a successful, vertically integrated multifamily owner-operator, ACRE Credit I has a distinct advantage in that managers of the credit fund are able to leverage ACRE’s broader platform to enhance both the underwriting of investment decisions and the management of properties its lending against. A natural complement to the strategy, ACRE invests capital alongside its investment partners and repeat sponsor borrowers through its’ private equity vertical.
“The uncertainty of the economic climate over the last 16 months has had acute effects for commercial real estate, causing many investors to seek a more secure risk-return profile for their commitments,” said Daniel Jacobs, ACRE Partner and Head of Origination. “Institutional multifamily assets offer a more stable long-term outlook than many other areas of the market. ACRE’s experience in this area, access to fresh liquidity and creative structuring approach offer a natural advantage in the sector, and we are pleased investors have taken notice.”
Through a series of equity and debt funds, ACRE manages more than $1.8 billion in assets across private real estate investments and loans. The firm specializes in value-add, multifamily opportunities and invests in workforce and affordable housing assets in strategic growth markets.
About Asia Capital Real Estate
Founded in 2011, Asia Capital Real Estate (ACRE) is a global real estate private equity firm managing capital for institutional and family office investors through a series of private equity and debt funds and currently has more than $1.8 billion in assets under management. Since its inception, ACRE’s acquisition, development and lending efforts have spanned 22,000 units across 78 properties in 33 cities. ACRE’s strategies focus on direct real estate equity and credit investments and are concentrated in high growth markets in the United States, with additional properties currently in development in Southeast Asia and the United Kingdom. ACRE manages a global multifamily housing portfolio with offices in Atlanta, New York and Singapore.