Archway Capital has launched a new commercial real estate fund with the goal of raising $100 million to be invested across various asset classes. Through Archway Opportunity Fund II, the developer aims to achieve an annualized return of between 11 and 15 percent, with an additional focus on generating an annual income of four to five percent. The firm plans to raise the capital by the end of next year.
Some specific investments the fund will target include junior and senior loans, distressed opportunities, preferred equity, and other potential debt plays. They will be spread across CRE sectors throughout the country, including retail, multifamily, office, mixed-use and industrial.
Archway anticipates raising the bulk of the capital from existing partners it has engaged with since the Los-Angeles-based firm's founding in 2016. Most of its borrowers include real estate entrepreneurs that aim to bolster value of assets over a short-term plan.
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Bobby Khorshidi, CEO and chief investment officer of Archway, said in a statement that even though CRE investment has been at a stalemate in the past couple of years, activity is finally starting to pick up again.
“We are in the camp that sentiment across the space is finally changing as transaction volume continues to increase, however, traditional funding sources will be slow to react," he noted.
"Having fresh capital to deploy, our Opportunity Fund II is poised to earn risk-adjusted returns on quality assets where sophisticated borrowers are unable to access credit from traditional lenders.”
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