LOS ANGELES-Mesa West Capital plans to hire five new investment professionals at the company's headquarters office here, company principal Ryan Krauch tells GlobeSt.com, as the company gears up to place nearly $615 million in capital from a new fund. The five new hires in Los Angeles will follow the company's expansion earlier this year with the opening of a New York City office and the recent expansion of that office with another new hire.

Krauch says that Mesa West has "at least five positions that we need to fill" in L.A., including analysts, associates and other investment professionals who will focus on originations and asset management. He notes that the company also recently added a new hire to its accounting department and will likely hire one more person in that department.

Krauch cites two reasons for Mesa West's expansion: The nearly $615 million in commitments for its Mesa West Real Estate Income Fund II LP and the general increase in activity that the company sees in the capital markets. He points out that in the capital raise for the new Fund II, Mesa West was looking for $300 million to $400 million in commitments but far surpassed that with the nearly $615 million.

"Because of that, and the activity we see building, we want to make sure we have plenty of coverage" in terms of staff, Krauch says. He notes that the new fund is only one of Mesa West's capital sources and that, with leverage, the company has the capacity to finance $2 billion worth of deals.

As Krauch pointed out when Mesa West announced the total commitments to its new fund, the new capital raise will allow Mesa West to continue to focus on directly originating bridge financing with an emphasis on first mortgage debt for middle-market sized transitional and value-add properties in the Western US.

"We're putting out first mortgage debt, which everybody has been searching for, and most importantly, ours is nonrecourse, which is very hard to find in today's market," Krauch says.

Although today's increased transaction volume and dollar volume still fall far short of the totals during the boom years, Krauch says the deal flow is definitely greater than it was a year ago. Banks are finally marking their assets to prices that make sense in the market, there is capitulation on the part of property owners who have been trying to hold out during the downturn, and banks are showing a willingness to renegotiate with existing borrowers, Krauch says. All of that means "deals that we can help to recapitalize," he says.

Mesa West focuses closely on Western US markets, but the company is looking for deals across the country, especially now that it has a New York office, Krauch says. The company opened that office in February with the hiring of Raphael Fishbach, formerly of Ramius LLC, as director to head the office. Mesa West recently hired Russell Frahm, formerly with the New York office of Cushman & Wakefield Sonnenblick Goldman, as an associate in the New York office.

Krauch tells GlobeSt.com that Mesa West is fortunate to be in an expansion mode, especially in light of the overall employment picture in the US. "These days, it's nice to be able to talk about job growth of any kind, whether it's real estate or not," he says.