KKR Boasts Record Commercial Loan Pipeline of $42B

Global investment firm KKR’s commercial real estate loan pipeline has reached an all-time high.

The firm currently has a record volume of $42 billion in financings for commercial properties lined up, according to data contained within a note to investors from KKR’s Matt Salem, Joel Traut and Patrick Mattson. Bloomberg first reported the news.

The company leaders attributed the record pipeline to tariffs under the Trump administration, which provided “an unexpected new set of opportunities” to provide lenders with financing alternatives as they waited for clarity on how the policies would shake out, the note said.

A spokesperson for KKR did not immediately respond to a request for comment.

KKR usually provides loans at a ratio of 60 to 70 percent of the value of the real estate to have a “large equity cushion able to absorb losses,” the note said.

However, despite the record loan pipeline, Salem said KKR remains “cautious” about tariffs and high inflation, as the firm predicts construction activity will stay stagnant due to higher labor and material costs, according to the note.

News of KKR’s $42 billion loan pipeline comes after the firm raised more than $850 million in February for its Opportunistic Real Estate Credit Fund II, which will target first mortgages tied to high-quality properties while also acquiring commercial mortgage-backed securities loans, as Commercial Observer previously reported.

The fund will also serve as a way for landlords to access private credit and avoid bank loans as interest rates grow higher.

“We believe private capital will play an increasingly important role in the commercial real estate market as loan demand continues to climb, and this positions us very well to deliver attractive risk-adjusted opportunities for our investors,” Traut, partner and head of originations for real estate credit at KKR, said in a statement at the time.

But KKR isn’t the only major company splashing money around for commercial real estate.

In March, Blackstone, one of the world’s largest alternative asset managers, announced it closed on an $8 billion commercial real estate debt fund, matching its previous record $8 billion real estate debt fund from September 2020, the Wall Street Journal reported.

Blackstone also recently made its first purchase of a Manhattan office property in years, picking up a 49 percent stake in 1345 Avenue of the Americas and securing $850 million of commercial mortgage-backed securities financing for it.

Isabelle Durso can be reached at idurso@commercialobserver.com.