KKR shatters CRE lending record as construction, borrower demand pick up

Investing giant has already committed to $8B in loans this year while avoiding NY, SF

National /
Jul.July 08, 2021 10:20 AM
KKR's Henry Kravis (Getty, iStock)

KKR’s Henry Kravis (Getty, iStock)

The year’s only half over, but KKR & Co. has already broken a personal record.

The private equity giant has committed to $8 billion in commercial property loans so far this year, Bloomberg reported, more than doubling its previous full-year record of $3.1 billion, set in 2019.

Such gains come at a time when construction is picking back up and so is demand for new loans as low interest rates facilitate refinancing.

Total debt on U.S. commercial and multifamily properties had risen to just under $4 trillion at the end of March, a 1.1 percent increase since the start of the year, Bloomberg reported, citing Mortgage Bankers Association data.

KKR provided financing for office projects in Atlanta, Dallas and Miami, while avoiding cities hit harder by the pandemic.

“In New York and San Francisco, I think you’ve got to wait a little bit to see how things play through,” Matt Salem, KKR’s head of real estate credit, told the publication.

KKR’s real estate finance unit has already closed on $4 billion in commercial property loans and committed to a further $4 billion through the end of June, according to Bloomberg, which noted that the firm’s increase in lending volume is partially a function of its access to new financing.

Earlier this year, KKR spent $4 billion to acquire Global Atlantic Financial Group, a retirement and life insurance provider which invests in longer term real estate debt. And in May, it launched KKR Real Estate Select Trust, specializing in higher-yielding commercial real estate debt.

[Bloomberg News] — Cordilia James





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