Mesa West Closes $1.4B Fund

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Mesa West Capital, the private U.S. real estate credit arm of Morgan Stanley Investment Management, has closed its Mesa West Real Estate Income Fund V L.P. at approximately $1.37 billion.

The final amount well exceeded Mesa West’s original $1.0 billion target for the fund.

Fund V is the newest and largest of Mesa West’s series of closed-end, value-add funds. The series started in 2005 and is the first successor vehicle raised by Mesa West since joining Morgan Stanley Investment Management.

The new fund surpasses the $900 million in commitments raised for Mesa West Real Estate Income Fund IV L.P. and includes among its investors domestic and international public and private pension funds, insurance companies and individual investors.

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Fund V has been established, according to Mesa West, “to originate, purchase and manage loans secured by value-add/transitional commercial real estate assets throughout the U.S. …”

According to Mesa West, such assets have seen increased demand due to regulatory changes resulting from the global financial crisis and the current volatility and dislocation in the capital and property markets. The fund’s purpose is to create a diversified portfolio of investments designed to produce current income and attractive risk-adjusted returns.

In a prepared statement, John Klopp, global head of Real Assets for Morgan Stanley Investment Management, referenced the strong investor demand for this fund and the $62 billion in client assets that MSIM currently manages under its Real Assets platform.

Mesa West’s recent activity

Last May, Mesa West originated a $167.8 million acquisition loan that undergirded Crestlight Capital’s $192.5 million purchase of SouthPark Towers, a two-building, 526,650-square-foot office campus in Charlotte, N.C.