LOS ANGELES-Mesa West Capital LLC, a Los Angeles-based real estate investment manager, is set to close its third value-added debt fund this month with commitments between $730 and $750 million. With $700 million in commitments already sourced, the firm has already surpassed its original target of $650 million.

The excess funding is indicative of a successful net return track record the firm has supplied investors in its earlier two funds. In June 2010, Fund II, for example, closed at $614.5 million in commitments and produced and internal net return of 15%. The target net return for Fund III is 12% with a 1.35% management fee on committed capital and invested equity. These management fees are 15 basis points lower than Fund II.

The fund opened during quarter one of 2012 and had earned $379.2 million at its first close. Early investors who committed funds both before and after the first close include Texas Permanent School Fund, Los Angeles City Employees Retirement System, Hawaii Employees' Retirement System and San Diego City Employees' Retirement System. These investors have individually committed between $20 million -$75 million.

Although the firm works in gateway cities on the East Coast, the majority of the capital they provide is to real estate acquisitions, re-financings and re-capitalizations projects on the West Coast, including Fund III's first deal, which was secured in a $55-million loan to Emmes Asset Management for the recapitalization of a 376,000-square-foot class-A office complex in Newport Beach, CA. The firm has currently closed $300 million in acquisitions on behalf of Fund III.

Instant Insights /

Mesa West Value-Add Fund Hits $700M

Related Stories

Recommended For You