Nuveen Closes $650M Industrial and Multifamily Transitional Fund
Nuveen Real Estate has closed its fund that's investing in multifamily and industrial assets. The total fundraising, which drew commitments from pension funds and insurance companies, reached $650 million.
Particularly, TIAA's General Account made a major contribution with its $150 million pledge. The amount raised also exceeded the original target of $500 million.
The U.S. Strategic Debt Fund is originating senior floating loans for transitional commercial real estate properties, which require restructuring, according to Nuveen. The fund has made 19 investments in the country for a total volume of $1.3 billion since the first close in April 2024. Most of the 16 market portfolio is concentrated in Dallas-Fort Worth (18 percent of gross asset value), followed by Atlanta (10 percent) and Orlando (nine percent).
By asset class, the portfolio breaks down to 60 percent in multifamily and 40 percent in industrial. It's unclear if the fund will target other asset classes or regions.
The move comes as the CRE debt market is starting to shift. CBRE's third-quarter report revealed that average loan-to-value ratios rose to 63.8%, up from 63.3% in the previous three months. Also, loan constants dropped by 20 basis points, while mortgage interest rates declined by 28 basis points. This is starting to create more flexibility for buyers, as lenders show willingness to tolerate risk.
"We are pleased with the strong investor response to our U.S. Strategic Debt Fund, which reflects the confidence institutional investors have in our debt platform and the compelling opportunity we see in today's commercial real estate lending market," Jason Hernandez, head of real estate debt of Americas at Nuveen, said in a statement.
"The successful close positions us well to capitalize on what we believe are attractive opportunities in an environment where traditional lenders have pulled back."
Since 1934, Nuveen has originated more than $50 billion in loans. Also, the New York-based firm has $139 billion in assets under management.
Source: GlobeSt/ALM