Ralph Rosenberg

If Ralph Rosenberg had to describe 2023’s commercial real estate market in one word, it would be “paralyzed.” Still, KKR got moving, and leaned into investment opportunities across the globe. 

“In a year where market participants had a challenging time figuring out ways to put money to work in differentiated contexts, we — largely because of the scale at which we operate, the fact that we invest across both credit and equity, and the fact that we have the benefit of the KKR brand recognition — remained incredibly active,” Rosenberg said. 

KKR’s fourth-quarter earnings backs up that statement very nicely. The investment firm reported record fee-related earnings, up 21 percent year-over-year.

KKR also reported assets under management of a whopping $553 billion — a 10 percent annual increase — and fee-paying assets under management of $446 billion, itself an 8 percent year-over-year gain. The company’s uncalled capital commitments totaled $99 billion, it raised new capital to the tune of $31 billion for the fourth quarter alone ($69 billion for the year), and it invested $16 billion in capital in the quarter ($44 billion for the year). 

From a standing start a little over ten years ago, KKR’s real estate business has grown to approximately $70 billion of assets under management, spread approximately evenly across equity and credit. 

“When you deconstruct our activity, it ranges from selectively investing in our opportunistic strategies in the U.S, Asia and Europe, to being more acquisitive in Europe and in Asia with our recently formed core-plus strategies that we created in both those regions, each with a billion dollars of capital. And marrying that core-plus activity with the prolific activity that we’ve enjoyed off of our KKR Japan Realty Management platform in Japan,” Rosenberg said.

 “When you feed all of the international activity into the U.S. context, we’re one of the largest mortgage originators in the U.S. and Europe.” he said. “KKR originated billions of new commercial mortgages and either purchased or traded several billions of dollars of real estate mortgage securities, which complements everything we are doing as owners.”

Rosenberg pointed in particular to a large transaction in Japan as just one of his personal  bright spots — a $1.4 billion acquisition of a portfolio of warehouses. 

“We did a corporate carve-out for 32 logistics assets out of a portfolio company in our private equity fund, and financed that with the issuance of equity in a publicly traded Japanese REIT that we control,” Rosenberg said. 

On U.S. shores, KKR kicked off 2024 by snapping up the remaining 37 percent of Global Atlantic Financial Group, after acquiring the majority of the insurance platform in 2021. The insurance capital came in handy for KKR Real Estate Credit’s business this past year, with its diversity of capital allowing the platform to stay consistently in the market throughout the Dramamine-worthy ups and downs.