Global investment firm King Street Capital Management said this week that it has raised over $1 bn (€950 mln) of capital commitments at the final close of its third opportunistic real estate fund, Real Estate Fund III (REF III).
REF III leverages King Street’s expertise in navigating periods of market stress and dislocation to invest in special situations and select high-conviction themes in the US and Western Europe, the company said. The fund targets opportunities where King Street can be a solutions provider to stressed assets and owners through rescue capital, whole loan solutions and subordinate financing.
While King Street expects REF III to focus primarily on special situations opportunities, the fund will also deploy capital into existing thematic platforms including pan-European last-mile logistics, Spanish student housing and US production studios.
'The probability of widespread distress in the commercial real estate market has increased significantly due to the impact of higher rates, lower values and tightening credit conditions,' said Mark Van Zandt, co-head of Real Estate at King Street. 'We believe our real estate strategy is particularly relevant in the current market environment and benefits from King Street's well-established capabilities investing in stressed and distressed markets over the past 28 years.'
King Street’s dedicated real estate team is bolstered by the firm’s fully integrated global investment team of over 70 professionals worldwide across 7 offices, with significant presence in New York City and London.
'With REF III’s flexible mandate, the Fund is well positioned to capitalize on opportunities that are unfolding in the real estate market globally, and we expect the most compelling will be in special situations,' added Paul Brennan, co-head of Real Estate at King Street. 'The commitments from our partners demonstrate their belief in our ability to deploy capital in what should be a very interesting time as an opportunistic real estate investor.'