Morgan Stanley to Buy Mesa West Capital

By Scott Baltic, Contributing Editor

Jeff Friedman, Mesa West Capital co-founder

Morgan Stanley Investment Management will purchase Mesa West Capital LLC, according to an agreement announced by Morgan Stanley. No dollar figure was released in connection with the transaction.

Mesa West, which has more than $5 billion in gross assets under management, will keep its name and will operate as a separate business unit within MSIM’s Real Assets group, which currently manages $47 billion in client assets. Mesa West will also remain headquartered in Los Angeles, and its senior management, led by Co-Founders Jeff Friedman and Mark Zytko, will continue to manage the company on a day-to-day basis.

“Mesa West is a perfect addition to our suite of strategies across real assets and private credit. We are excited to have the Mesa West team join MSIM, and we are confident that the combination will be seamless given their shared focus on clients, strong investment performance and collaborative culture,” Dan Simkowitz, head of MSIM, said in a prepared statement.

Mark Zytko, Mesa West Capital co-founder

“MSIM is the ideal long-term strategic partner for Mesa West. Its strong commitment to real estate and deep global relationships and resources will help us continue to provide the best solutions and investment performance for our investors and long-term opportunities for our team,” Friedman and Zytko added.

The transaction is expected to close in the fourth quarter.

Mesa West declined to provide additional information about the transaction to Commercial Property Executive.

Strong track record

Since its inception in 2004, Mesa West has originated more than 250 loans totaling about $12 billion. The company deploys capital primarily through originating transitional first mortgages to strong sponsors in core and secondary markets in the U.S.

The company describes its platform as focused on “providing borrowers short-to-medium term balance sheet capital for property acquisitions and recapitalizations of existing assets” through loans of up to 75 percent LTV/LTC “for core to value-add transitional assets….”

In transactions earlier this year, Mesa West:

• Provided a $16 million, five-year, floating-rate, first mortgage loan for the purchase of a fully leased downtown San Francisco retail building;
• Originated $63.8 million in short-term first mortgage debt in two separate financings secured by a shopping center in Walnut Creek, Calif., and a vacant office building in San Diego;
• Made its first loan in Tennessee, an $88.3 million first mortgage through which Magellan Development Group refinanced a 313-unit Class A multifamily building in downtown Nashville.

Images courtesy of Mesa West Capital