Madison Realty Capital Raises More Than $2B For New Debt Fund

Dollars

One of the most prolific firms that toes the line between investor, developer and lender has raised more than $2B for a new debt fund.

Madison Realty Capital closed its sixth debt fund after raising $2.04B in equity commitments, the firm announced Thursday. The fund, MRC's second that eclipsed $2B, would both originate and purchase loans in the U.S. for multifamily properties, hotels, student housing, industrial, retail, office and land plays.

MRC said in the release it's the largest U.S.-focused real estate debt fund raised this year.

The infusion means MRC can outlay up to $8B with leverage, according to the release. The fund has already completed roughly $3.8B in deals in 28 transactions in the U.S. and is 45% called on its capital commitments, according to the release.

“Institutional investors are increasingly focused on private credit, which is a rapidly growing portion of many portfolios,” MRC Managing Principal Adam Tantleff said in a statement.

MRC has been an active private lender for years, but it has faced increased competition in the space. TPG, LaSalle Investment Management, Brookfield, Nuveen and PGIM have all raised private real estate credit funds to take advantage of the industry's emergence from the worst downturn since the Global Financial Crisis, Reuters reported. In the first quarter of this year, private lenders accounted for nearly half of all CRE lending activity, according to CBRE.

MRC is also an active developer — it landed a $130M loan in July to develop 644 14th St., a 24-story mixed-use project with 200 apartments and 165K SF of retail space in Manhattan's East Village, Crain’s New York Business reported.

Its ability to take over projects has allowed it to take advantage of its borrowers' distress. In Los Angeles, MRC took over the bulk of a $1.1B multifamily portfolio from WS Communities via deed-in-lieu-of-foreclosure agreements and is now planning the tallest tower in Santa Monica at one of those properties, GlobeSt reported.

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