Debt

Overview & Investment Strategy

Led by Managing Partners Justin Kennedy, Toby Cobb, and Jonathan Roth, Grass River Real Estate Credit Partners targets attractive risk/reward investments in first-lien commercial real estate debt amid market dislocation driven by broad market volatility and transformative new regulations in addition to opportunistic situations where inefficiencies are common regardless of market cycles.

  • Strong CRE fundamentals offer favorable risk/reward amid debt market dislocation driven by macro volatility and new regulation
  • Principals are 25+ year veterans with strong track records in CRE debt markets where incumbent lenders face regulatory upheaval
  • Vertically integrated origination & servicing modeled on best practices of traditional lenders to mitigate risk and enhance returns
  • Targeted asset sourcing driven by long-term borrower relationships, hands-on diligence and intense cash flow underwriting
  • Conservative risk control practices emphasizing continuous borrower interface, high-touch asset management and loan servicing

Market Opportunity

Long relationships and broad capabilities can access favorable risk/reward in markets dislocated by new regulations

  • Macro uncertainty and lender constraints have muted building since 2010 leaving CRE market with strong cash flow fundamentals
  • $1.1 trillion in 2016-18 maturities* sharply increase lending demand; over-levered 2006-08 loans require specialized capital
  • Favorable competitive environment: banks originating 47% of 2007 CMBS** and nearly all foreign banks have exited the market
  • New regulatory and capital rules constrain credit formation and force many incumbent lenders to alter current lending practices
  • Strategy and capabilities designed to control risk and exploit opportunities as markets evolve in the new regulatory climate