The fund will be targeting both hard assets and paper, FCPcofounder and Partner, Esko Korhonen, tells GlobeSt.com. The assetswill be in FCP's traditional sweet spot of value-add, repositioningplays. "But we also feel there is a tremendous opportunity forlending right now." Mezzanine capital will be atarget--specifically, purchasing such paper. Bridge financing isanother probable activity. It is also possible, Korhonen continues,that the fund may delve into providing senior debt.
If the latter happens, FCP can count itself as part of a rapidlythinning group. Mezzanine paper, by contrast, has become a favoredinvestment by many real estate funds because of the risk-adjustedreturns it can now offer.
The most likely scenario is that the fund will buy notes andprovide bridge financing, he says. "But the beauty of this fund isthat we have the flexibility and discretion to go after whatever wethink is the best opportunity in the market."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
