KKR Closes Opportunistic Credit Fund at $850M

February 17, 2025

Loan originations will focus on first mortgages secured by high-quality properties across the U.S. and Western Europe.

Global investment firm KKR has closed its Opportunistic Real Estate Credit Fund II at about $850 million. The investment vehicle will provide senior loans and real estate securities in the U.S. and Western Europe.

Image depicts one of Park 8Ninety's warehouses — In July, KKR-advised capital accounts in conjunction with REPA III purchased Park 8Ninety in Missouri City, Texas. *Image courtesy of CommercialEdge*

Loan originations will focus on first mortgages secured by high-quality properties owned by institutional sponsors and sited in major markets. Meanwhile, securities investments will leverage KKR’s position as the largest third-party purchaser of risk retention CMBS B-Pieces, according to the company.

As of press time, a KKR spokesperson had not replied to Commercial Property Executive’s request for additional information.

KKR management emphasized the timing of the close, “underpinned by the opportunity to lend on high-quality, well-located assets at conservative leverage levels on re-set property values,” and stated that “private capital will play an increasingly important role in the commercial real estate market as loan demand continues to climb.”

Since 2015, KKR’s real estate credit strategy has originated $43.4 billion of loans. The firm had $14 billion invested in commercial mortgage-backed securities as of September 2024.

Wide-ranging activity

Characteristically, KKR has been an active investor over the past year.

For example, last July KKR acquired a 12-building logistics park in southwest Houston from Artis Real Estate Investment Trust for $234 million. Park 8Ninety totals about 1.8 million square feet and was completed between 2017 and 2022.

Then in August, capital accounts advised by KKR purchased an approximately 2 million-square-foot, six-building portfolio of Class A logistics assets for $377 million. The facilities are in gateway and infill submarkets in Seattle, Atlanta, Philadelphia, New Jersey and the San Francisco Bay Area.

On a different front, last May KKR and Healthcare Realty Trust Inc. entered into a strategic joint venture to own and invest in medical outpatient buildings. Healthcare Realty was to receive about $300 million for its contribution and partnered with KKR to explore further acquisitions.

KKR