Two high-profile asset management firms have raised more than $6B combined via opportunistic funds, targeting commercial real estate challenged by loan maturities drawing closer.
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TPG Real Estate, a subsidiary of Fort Worth, Texas- and San Francisco-based alternative asset manager TPG Inc., has raised roughly $5B through a fund and related vehicles for hard-to-acquire properties whose owners are struggling, CoStar News reported.
New York-headquartered ACORE Capital, meanwhile, announced Thursday that it had secured $1.1B in commitments for a fund for opportunistic credit investments.
Both funds are eyeing an incoming wave of financial difficulties for property owners. Almost $800B of U.S. commercial property loans are due before the end of 2026, and another $733B are expected to come due next year, according to Trepp.
TPG is betting that some owners will sell as lower asset values clash with high refinancing costs due to interest rate hikes. That is creating an opportunity for investment capital to step in and take over assets.
The firm said the raise, which is its fifth opportunistic real estate fund, is part of a “significant fundraising cycle” for TPG’s real estate business.
“We see increasing capitulation sort of quarter by quarter, [owners with] large pools of real estate assets that need to actually liquefy and sell assets,” TPG CEO Jon Winkelried said Thursday during a third-quarter earnings call. “We’re seeing the opportunity to invest in what we think are very attractive cap rates and also way below replacement value.”
TPG’s real estate arm has already capitalized on some opportunities, acquiring a national portfolio of medical outpatient properties in an off-market deal in Q3. The firm had $13.7B available for real estate investments at the end of the quarter and has invested almost $2B more via its real estate strategies year to date than it did in the same period last year.
ACORE’s fund, its second such vehicle, exceeded its $1B target, the firm said in a press release. It launched its first fund in 2020, targeting potentially high-yield opportunities in CRE as it sought to build on its real estate credit platform, underwriting expertise and borrower relationships.
In a show of the strength of investor demand, the fund that closed Thursday raised more than four times its predecessor fund, ACORE CEO and co-founder Warren de Haan said in a statement.
“We have built our business around the ability to navigate market cycles, identify where capital is most needed and deploy it with discipline,” de Haan said. “At a moment of significant dislocation across commercial real estate, we believe our experience, relationships and capabilities position us to capitalize on the market opportunity.”
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