S3 Capital finalized the fundraising for its closed-end fund focused on construction lending for multifamily developments in supply-constrained markets.
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The fund, S3 LB RE Credit Fund III, netted $850M in discretionary commitments, with an additional $465M in co-investment guarantees. It exceeded its $650M target and closed at its hard cap, the company said in a news release. Total investable capital is about $1.3B, with an expected loan origination capacity of roughly $4.3B.
“The opportunity in construction lending today is driven by a clear imbalance between the need for new housing supply and the availability of capital to finance it,” S3 co-founder and principal Robert Schwartz said in a statement.
Since the New York City-based multifamily construction lender initially closed its fund in November 2024, it has directly originated more than $2.3B in loans and drawn down nearly half of its committed capital. It nabbed commitments from a host of investors, including public and private pension plans, insurance companies, family offices and wealth management firms.
S3's third fund received support from investors in its second fund and new institutional investors.
S3 co-founder and principal Joshua Crane told Bisnow in April 2025 that even amid tariff whiplash across the country, the company was operating with a business-as-usual mindset. For each deal, he said S3 was scrutinizing budgets, visiting every site, forgoing lending above a 65% loan-to-value ratio, and ensuring a good amount of borrower equity.
Crane said at the time that the multifamily lending environment was more favorable than it had been a few years ago because there were fewer lenders in NYC's multifamily market. Because of that, S3 can more easily pick favorable projects, he said.
“As traditional bank lenders continue to pull back and many debt funds remain focused on bridge lending, we are seeing a deep and growing pipeline of strong investment opportunities,” Crane said in a statement Thursday.
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