Pearlmark closed its sixth high-yield credit investment fund, Pearlmark Mezzanine Realty Partners VI, which will serve as the firm’s exclusive subordinated debt investment vehicle, fulfilling borrower demand for gap financing solutions on recapitalizations, acquisitions and development projects.
Pearlmark Mezz VI will target domestic institutional real estate assets through a variety of debt instruments, primarily focused in mezzanine lending. Pearlmark Mezz VI will primarily invest in multifamily and other adjacent sectors, including student housing, active senior and build-for-rent communities, as well as in industrial/logistics sectors. The fund will also consider investments in mixed-use, medical office and grocery-anchored retail properties. Pearlmark covers the top 30 metropolitan areas nationwide and will consider other selective locations.
The first closing for Pearlmark Mezz VI totaled more than $185 million in commitments, including discretionary managed accounts. The targeted fund size for Pearlmark Mezz VI is in excess of $400 million. Loan sizes are expected to range from a minimum of $5 million to $50 million or greater in combination with co-investment capital on larger loan sizes. Final capital closing for Pearlmark Mezz VI is expected in Q1/25.
“Continuing dislocation in the real estate credit markets with widespread pullback by the banking sector and the higher interest rate environment negatively impacting valuation and underwriting levels have created strong sponsor demand for Pearlmark’s gap financing structures,” Doug Lyons, managing principal and head of debt investments for Pearlmark, said. “We strive to be a mezzanine provider of choice for borrowers seeking fast, flexible capital solutions; senior lenders requiring capable and experienced co-lenders; and investors pursuing attractive risk-adjusted returns.”
“This fund closing, the sixth in our series since 2001, represents an important step toward growing Pearlmark’s credit business by efficiently matching the needs of our real estate borrowers with those of our institutional investors during this complex period in the capital markets,” Stephen Quazzo, CEO of Pearlmark, said. “We are thrilled and delighted with the strong level of interest we are seeing from both groups.”
