Mesa West raises over half of $750m target on Fund IV

The Los Angeles-based real estate firm has gathered $370m towards its latest debt fund.  

Mesa West has raised $390 million towards a $750 million target for its latest debt fund, Mesa West Real Estate Income Fund IV, PDI sister title Real Estate Capital has learned, based on documents filed with the US Securities and Exchange Commission (SEC).

The firm closed its previous fund, Mesa West Real Estate Income Fund III, with $752 million in commitments in November of 2013. The second fund closed with $614.5 million in commitments in April 2010. Both were substantially oversubscribed.

Fund III targeted 12 percent net returns and was backed by investors including the Texas Permanent School Fund, the Los Angeles City Employees Retirement System (LACERS), the Hawaii Employees’ Retirement System and the San Diego City Employees’ Retirement System. Most of those invested in the Mesa West’s second fund as well.

Mesa West is best known as a so-called transitional real estate lender, and one of the largest behind giants Blackstone Group and Starwood Property Trust.

In a representative deal in May, the Los Angeles-headquartered company provided New York-based Angelo, Gordon & Co. and Virginia-based Atlantic Realty Companies with two five-year loans totaling $78.9 million for the acquisition and stabilization of four-office buildings in Reston, Virginia.

At the time, occupancy in at least one of the buildings was as low as 38 percent, so a portion of the loan was reserved for capital improvements aimed at spurring new leases.

The new fund will maintain a similar investment strategy.