Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-Grosvenor Investment Management has raised $100 million for a fund that is providing mezzanine or preferred equity and co-investment equity to homebuilders that need to capital to get to the now out of reach senior loan level. The first round of fund-raising closed in March and the company is hoping to raise another $100 million, according to David Reiner, managing director of Capital Markets of Grosvenor Investment Management.

Of that money, the DC area is likely going to receive the biggest percentage allocation, Reiner tells GlobeSt.com. “It is a great market with strong fundamentals and we hope to invest 20% to 25% of the capital here.” Cleveland’s Key Bank is a co-sponsor in the fund.

The fund, which hasn’t dispensed any money yet, is focused on 10 markets including New York City, Denver and Los Angeles, but with a heavy emphasis on the Mid-Atlantic. “We are aiming at middle to upper home builders, financing infill projects,” Reiner says. Other than that demographic and investment criteria, GIM is following the same star with this fund that the growing numbers of investors in distressed debt are: finding opportunity in the current capital markets crisis.

“Homebuilders at one time could borrow at 80% loan-to-cost. Now they are lucky to get 55% loan-to-cost.” The point of the fund is to help the developer make that leap to a 65% or higher loan-to-cost ratio. “It is project-by-project financing,” Reiner says. He declines to discuss specific deals but does say that the first project is likely going to be in New York City. “By the end of the first half of the year we will have invested in DC.” He projects that the fund will have invested in at least three DC-based projects by the end of 2008. Taking the homebuilders’ own debt and equity into account, he expects to invest in between $400 million to $500 million worth of projects.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.