Keelbase Capital already has ambitious plans for commercial real estate. In its launch announcement, the company, filled with industry veterans who bring almost four decades of experience to the table, is gearing up to capitalize on a $105 billion opportunity in Seattle, Washington.
That may not be how much Keelbase winds up investing right away — but that's how much the combined value of retail, office and industrial assets has reached today, according to the firm. Also, most of that is overleverage, when assets carry too much debt. But that's where Keelbase plans on coming into play, hoping to buy properties at significant discounts and potentially reposition them.
"Values have dropped, owners are feeling pressure from lenders, and growing deal volume is finally providing pricing clarity," Paul Roeter, co-founder and principal at Keelbase Capital, said in a statement.
"We see a generational opportunity to deploy capital, and we're building Keelbase for the long run."
That value-add portion just represents one of Keelbase's strategies. It will also act as a creditor and provide mezzanine debt, preferred equity, senior financing and other structured solutions.
The newly assembled company intends to commit over the next three years between $125 and $250 million in the private credit sector. It will also pursue joint venture acquisitions, which it plans to pour between $200 million and $300 million into.
The Emerald City tells an interesting story currently. On one hand, Keelbase said that construction starts in the region could fall by as much as 90 percent and the city is expected to lead among coastal markets in forecasted GDP growth and net in-migration through 2029. However, multifamily rents have remained flat due to high supply. But still, the potential is there for Seattle to rebound and for Keelbase to capitalize.
For now, Keelbase said it will exclusively seek opportunities in the Seattle metro area, but in the long term, it has ambitions to expand to other markets that hold similar economic trends.
"Seattle is one of the most dynamic and fundamentally sound real estate markets in the country, but it's also one of the most exposed to the reset now underway," Roeter said.
Roeter, who recently co-led Cushman & Wakefield's equity debt team in the Pacific Northwest and the company's structured finance practice, brings almost 20 years of experience in asset management, construction and institutional real estate capital markets.
Then there's also Cooper Engst, co-founder and principal of Keelbase Capital. He offers 20 years of experience in CRE development and in institutional capital markets.
"We're not chasing volume. Keelbase is targeting quality assets with strained capital stacks in locations we understand block by block," he said.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.