Chicago, IL (December 1, 2022) – Pearlmark is pleased to announce the final closing of its fifth high-yield investment fund, Pearlmark Mezzanine Realty Partners V, L.P. (“Pearlmark Mezz V”). Pearlmark Mezz V will serve as the firm’s exclusive subordinated debt investment vehicle, fulfilling borrower demand for gap financing solutions in refinancings, recapitalizations, acquisitions, and development projects. Dating back to 2001, Pearlmark has originated nearly $2.0 billion in 147 subordinated debt investments. Consistent with the investment strategy of Pearlmark’s four prior mezzanine funds, Pearlmark Mezz V is targeting a broad range of domestic commercial real estate assets through a variety of debt instruments, including mezzanine loans, the subordinate interests of A/B structured loans, and preferred equity. Asset classes considered include multifamily, student housing, active senior, rental home communities, industrial, office, medical office, grocery-anchored retail, and mixed-use. Pearlmark covers the top 30 metropolitan areas nationwide and will consider other selective locations.
The final closing for Pearlmark Mezz V totaled more than $210 million in commitments, including discretionary managed accounts. In addition, Pearlmark expects to have another $200 million in co-investment capital that will invest alongside Pearlmark Mezz V in select transactions. Target loan sizes range from $5 million to $50 million or greater.
Pearlmark Mezz V has made ten investments through 2022 in high-yield credit across the United States. The rapid rise in interest rates has continued to result in reduced overall credit availability in U.S. commercial real estate with loan advances by senior balance sheet lenders pulling back, creating greater demand for Pearlmark’s mezzanine capital. Despite volatility in the global capital markets, Pearlmark is seeing strong transaction flow in all three loan categories—acquisitions, refinancings, and construction. Pearlmark continues to be extremely selective with focus on the strongest sponsors, highest asset quality, and best submarket locations.
“We are thrilled to have completed the capital formation of Pearlmark Mezz V at a time of credit illiquidity. There is tremendous sponsor demand for our structured gap finance balance sheet solutions. Pearlmark will continue to strive to be the mezzanine finance provider of choice to best-in-class borrowers, senior lenders, and investors in our fund,” stated Doug Lyons, Managing Principal and Head of Debt Investments for Pearlmark.
Stephen Quazzo, CEO of Pearlmark, further commented, “Pearlmark has been an active commercial real estate lender since 2001 with nearly 150 mezzanine loans closed to date. Pearlmark Mezz V represents a continuation of this strategy and we are grateful for the support of our investors, borrowers, and senior lenders as we look to fill a critical need in the real estate capital stack.”
Pearlmark is a Chicago-based investment firm that targets domestic core to value-add real estate opportunities via commingled funds, separate accounts, and joint venture structures. Since 1996, Pearlmark has sponsored more than a dozen real estate equity and debt investment programs and completed 567 real estate equity and debt transactions on behalf of investors, representing $5.3 billion in equity capital commitments and $13.8 billion in gross investment value. Pearlmark is dedicated to creating value for its investors and offers a range of investment opportunities nationwide across various property types (office, industrial, multifamily). For more information, please visit https://www.pearlmark.com.