Mesa West Capital Closes Fourth Debt Fund At $900M Hard Cap

Jan 4 2017 | 6:57pm ET

Mesa West Capital has raised $900 million in capital commitments for its fourth debt fund, surpassing the vehicle’s $750 million target and hitting its hard cap.

The new fund, named Mesa West Real Estate Income Fund IV, is Mesa’s largest, according to the company. Like its predecessors, the fund will provide fixed and floating rate loans for properties in a range of categories across the United States. 

Investors include public and corporate pension funds, sovereigns, insurance companies, and foundations and endowments, Mesa added, with around 80% invested in one or more of Mesa West’s previous funds. 

Mesa West was among the first managers to focus exclusively on commercial real estate debt when it debuted its $208 million fund in 2005. It has since deployed more than $11 billion of loans across more than 250 transactions, the company said.

“With commercial property values at record highs, U.S. Federal Reserve edging towards higher interest rates, and global markets uncertain, institutional investors continue to seek the low volatility and high current income provided by our debt funds,” said principal Ryan Krauch in a statement.

“Our investors understand that they can often achieve better going-in yield and average cash-on-cash returns by lending on high quality assets than they can by buying them, while at the same time being in the most senior position of the capital stack, which is especially important in today’s low cap rate environment,” continued Krauch. 

Headquartered in Los Angeles, Mesa West Capital is a privately held debt fund manager and portfolio lender with more than $5.5 billion in equity under management. The firm provides non-recourse first mortgage loans for core/core-plus, value-added and transitional properties throughout the United States. 

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