REAL ESTATE NEWS

ACORE CAPITAL sees an opportunity to provide credit despite interest rate volatility, noting that discounts may be available for buyers to take advantage of. Suffice it to say, investors are buying it, with the firm snagging $1.1 billion at the close of its ACORE Opportunistic Credit II (AOC II), which exceeds its initial $1 billion target, according to a statement posted by the New York-based firm.

The closing represented more than a fourfold premium over ACORE's predecessor fund.

Building Commercial Momentum

For ACORE, it's looking to continue on its momentum built since its establishment. From 2015 to date, the commercial real estate manager has committed $1.34 billion in capital across opportunistic credit.

Now, it thinks its experience, which includes relationships established and its discipline, will help the company target where to deploy the capital. ACORE admitted that it will look for potentially higher-yielding plays across the commercial market.

So far across AOC II, the firm has invested $400 million through 14 deals.

"Opportunistic real estate credit continues to offer compelling risk-adjusted return potential, driven by a significant basis re-set across many asset classes that provides an attractive opportunity to finance business plans that can take advantage of today's discounted valuations," Matthew Drummond, senior managing director and head of high yield strategies at ACORE CAPITAL, said in a statement.

"In an uncertain capital markets and interest rate environment, institutional equity investors remain very selective. Utilizing ACORE's origination network and structuring expertise, we see an opportunity to generate equity-like returns at a more senior position in the capital structure."

Recent Deals Show Diversity

It's unclear if they are a part of AOC II, but ACORE has made major loan deals recently mainly in the Northeast region, according to the company's transactions. This includes a $240 million facility for a mixed-use property in New York City, $216 million for an office and retail property in New York and $150 million for multiple industrial locations across Massachusetts and Pennsylvania.

Outside of the Northeast, ACORE co-originated a $465 million debt stack deal with J.P. Morgan for a residential and hotel property in Miami.

This tells you ACORE's credit strategy is diverse and not limited to one asset class or region. But the real challenge is navigating the elevated interest rate environment. Where do the best opportunities lie ahead as ACORE has geared up more capital?

As of June 30, the firm had over $17 billion in assets under management.

Source: GlobeSt/ALM