Term Sheet: The Fed’s rate reduction; Madison Realty’s $2bn fundraise; Carlyle’s C-PACE commitment
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The larger than expected 50-basis-point rate cut by the US Federal Reserve provokes more questions about real estate deal momentum; Madison Realty Capital finds fundraising tailwinds with $2 billion of capital lined up for the next iteration of its real estate debt strategy; 凯雷投资集团 eyes green lending opportunities with $1 billion capital commitment to C-PACE lender North Bridge ; and more in today’s Term Sheet.
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They said it
“Playing in credit solutions to help re-equitize [the housing] segment is really where the big opportunity is going to be over the next two years”
Scott Rechler , chief executive and chairman of New York-based manager RxR Realty - REALTORS by Referral , speaking on CNBC ’s Squawk Box this week ahead of the Federal Reserve’s interest rate cut and its effect on real estate opportunities.
What’s new?
Rate de-escalation
The Federal Reserve reduced interest rates by 50 basis points at its September 18 meeting, bringing its target rate to the range of 4.75 percent-5 percent. The cut is the first drop in rates by the US central bank since it adopted a hawkish monetary policy in March 2022. Ryan Severino, CFA , chief economist at Miami-based manager BGO , said there will be first- and second-order effects from the Fed’s move. Continue reading...
It’s a wrap
Raising capital in the current market is no small feat for private real estate debt and equity fund managers. New York-based manager Madison Realty Capital , however, was not deterred, raising the second-largest real estate debt fund of 2024. The firm last week held the final close of its sixth debt strategy with $2 billion in capital commitments.
Trending
More InvestERS
Real estate debt is cropping up on more institutional investor agendas. The San Diego City Employees’ Retirement System this week staked a claim in the real estate debt investing landscape with a $25 million commitment to California-based manager Sabal Investment Holdings via Sabal Opportunities Fund III.
Data snapshot
Destiny USA?
The US ranked No 2 among the top 10 global capital markets for cross-border investing, according to a report published this week by London-based advisory Colliers. The stateside market only trails the UK on the capital flows leaderboard over the prior 12-month span ending in the second quarter 2024. Dive into the details...
Loan in focus
Bronx-bound capital?
Scale Lending, the debt financing arm of New York-based manager Slate Property Group , continued its construction lending momentum this week. The firm originated a $135 million financing package for the development of adjacent multifamily assets in the Bronx on behalf of Brooklyn-based developer and investor Beitel Group . Beitel’s plans for the sites at 261 Grand Concourse and 315 Grand Concourse call for two 14-story residential towers totaling 348,000 square feet. All 405 units of the towers are planned for lease with floorplans ranging from studios to two-bedroom apartments.