Term Sheet: KKR’s credit optimism; Deutsche’s loan sale; Trinity’s platform launch

KKR seeks more real estate credit opportunities as the manager’s real asset fundraising momentum holds steady; 德意志银行 is looking for liquidity with the sale of $1 billion of real estate loans as it reduces exposure to the asset class; Trinity Investments Inc is unveiling its own debt platform with sights on mezzanine, preferred equity as well as special situations opportunities; and more in today’s Term Sheet.

Tips & feedback to Samantha Rowan or email [email protected]

They said it

“We are beginning to see signs of a market recovery, including stable to slightly improving overall values”

Jarrod Phillips , chief financial officer at Ares Management Corporation , adding his name to those calling a market bottom as the firm delivered its quarterly earnings this week.

What’s new

Lending upstream

Select managers are securing commitments as they seek to grow their real estate credit portfolios. This week KKR signaled it would be staying on the offensive for pursuing more debt deals. “In real estate, the credit opportunity remains compelling with banks on the sidelines, and the equity investment opportunity is very attractive,” said Scott Nuttall, co-chief executive officer at KKR on the company’s Q2 2024 earnings call. Real estate debt and equity peers such as New York-based manager Blackstone have also kept fundraising momentum steady in the current market environment.

Deutsche dilemma

Frankfurt-based 德意志银行 is said to be looking to sell a $1 billion portfolio of US commercial real estate loans, per a report this week by Chicago-based research and analytics provider Zacks Equity Research. The bank, which has an approximately $16 billion portfolio of US real estate loans, wants to reduce the size of its portfolio for capital relief. Continue reading...

Trending

Banking 2.0

City National Bank of Florida , a Miami-based commercial bank, this week expanded its strategy with the launch of a capital markets group dubbed BciCapital . The business arm will provide capital solutions to private credit, private equity, hedge funds, insurance companies and alternative asset managers.

Data snapshot

High interest rates hit private real estate fundraising activity

Affiliate title PERE’s?H1 2024?Fundraising Report this week reported a decline in the annual aggregate capital raised by real estate private equity firms, which dropped from a peak of $258.7 billion in 2021 to $179.1 billion in 2023. The decline can be tied to higher interest rates, which are making it harder for deals to pencil and for managers to achieve their targeted returns on existing funds, according to Robert Gilman , a partner and leader of New York-based consultancy Anchin 's real estate group.

Read more...

People

Trinity’s credit capitalization

Trinity Investments Inc is rolling out a debt platform to target private credit and special situations opportunities with a focus on full-service, destination hotels and resorts in the US and Mexico. Trinity hired Luke Toland as managing director and head of the debt platform as part of the push into private credit. Toland joined from Charlotte-based 美国银行 Securities, where he worked as a managing director in the real estate, gaming and lodging investment banking group.

Loan in focus

Grocery getter

The grocery-anchored retail sector proved its lending value this week. A $720 million single-borrower commercial mortgage-backed securities refinancing for San Francisco-based Merlone Geier Partners & Merlone Geier Management s’ grocery-anchored retail portfolio was closed and slated to hit the market, according to a statement from New York-based advisory Eastdil Secured , which arranged the deal.

In a separate CMBS transaction – 富国银行 Commercial Mortgage Trust 2024-MGP – that is scheduled to close in mid-August, funds affiliated with Merlone Geier Partners secured $663 million for its retail portfolio through two uncrossed commercial mortgage loans originated by San Francisco-based Wells Fargo Bank

Explore the full content of this week's Term Sheet.