KKR closes $4.3B commercial real estate fund

Closing marks global investment firm’s third opportunistic fund

Henry Kravis, Co-Chairman and Co-CEO of KKR Real Estate Finance Trust (KKR, iStock)
Henry Kravis, Co-Chairman and Co-CEO of KKR Real Estate Finance Trust (KKR, iStock)

KKR is sealing the deal on a major commercial real estate fund after raising $4.3 billion.

KKR Real Estate Partners Americas, otherwise known as REPA III, is the company’’s third opportunistic fund. It closed more than two years after the second fund closed with $2 billion, according to the Commercial Observer.

As of last month, the company had committed $1 billion of capital from the fund for investments. Justin Pattner, the company’s head of real estate equity in the Americas, told the Observer the firm is taking a “thematic approach to real estate investing.”

The latest real estate fund will be geared towards a variety of commercial real estate assets. The Observer reports a particular focus will be put towards industrial, multifamily and self-storage assets. Pattner also told the outlet specific aspects of the office market would be targeted, including life sciences assets, Class A properties in the Sun Belt region and leisure travel-oriented hotels.

KKR’s real estate team oversees $33 billion in assets across the globe as of the end of the second quarter. The company’s real estate appetite appears to be only growing, as recent months have seen its links to other major investments in the industry.

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In a joint venture announced last month, KKR is set to join forces with Cornerstone Companies to develop health care facilities in the United States. The initiative aims to acquire more than $1 billion in real estate during the next few years. As part of its funding commitments, KKR plans to pull from its real estate and credit funds for the venture.

The company announced in August the formation of Strategic Lease Partners, a platform designed for triple-net lease investments. Commercial Property Executive reported at the time that KKR held ambitions for a portfolio exceeding $3 billion in diversified assets.

After spending three years and 50 transactions building a 14.5-million-square-foot portfolio of industrial properties, KKR sold the parcel in August to Oxford Properties Group for $2.2 billion. The Wall Street Journal reported the company would still own about 20 million square feet of industrial real estate after the deal.

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[CO] — Holden Walter-Warner