Canyon Partners has closed a real estate debt fund with more than $450 million in commitments, the Los Angeles-based hedge fund announced late last week. Its real estate arm, led by Robin Potts and Maria Stamolis, will oversee the new debt fund.
The debt fund will focus on originating senior and subordinate debt in markets across the U.S., Canyon said in a statement. “In today’s market, we are seeing opportunities to lend on high-quality real estate projects at particularly favorable risk/reward profiles,” Josh Friedman, co-founder of Canyon, said in the statement.
The firm’s real estate strategy “is a reflection of the structural opportunity present in the market today for alternative lenders and a natural extension of our long track record in the asset class,” Canyon co-founder Mitch Julis said in the statement.
A Canyon rep told Commercial Observer that they will seek to invest in primary and secondary markets in the U.S. with favorable demographic trends and high barriers to entry across property types, including multifamily, condos, office, industrial, retail, mixed-use, hotel, senior and student housing.
Canyon said, in addition to the competitive value-add space, they will be concentrating on middle market lending and also construction financing, an area in which they are particularly active. “Our tenure in the market and on-the-ground presence give us a deep understanding of the dynamic submarket conditions, allowing us to compete by reacting quickly to opportunities and working directly with sponsors. We’re able to structure lending solutions across the capital stack including senior loans, mezzanine loans and preferred equity with customized terms.”
Canyon, which has $24 billion in assets under management and more than 220 employees around the world, has supported the financing of some $9 billion in real estate assets through debt investments since its founding in 1990. The real estate group focuses on varying segments of the U.S. commercial real estate market across opportunistic and value add debt and equity investments.
Among other activities, Canyon Partners Real Estate acquired The Harvey apartment complex in Hollywood last month for an estimated $30 million, as Commercial Observer reported.
The group also originated a $102.3 million bridge loan for luxury rental towers in Miami early this year and, in late 2017, a $63.5 million construction loan for a condo building in Portland, Oregon.