Canyon Partners Real Estate has closed its largest U.S. real estate debt vehicle—Canyon Laurel Fund II—with more than $650 million of assets across the fund and related co-investments.
It is also larger than the $530 million predecessor fund that also included related co-investments.
The fund targets senior and subordinate debt investments in the top markets in the U.S. and spans all major property types. Canyon has already deployed more than 60 percent of the fund’s capital across a combination of primary originations and secondary market purchases.
Robin Potts, Canyon’s co-head of real estate, said in a prepared statement the pandemic has created an even more compelling environment for real estate debt as lenders, owners and developers have been faced with increasing liquidity needs. Coming into the pandemic, Canyon was positioned to allow it to move quickly and capitalize on the growing opportunities, she added.
Robin Potts noted about 70 percent of the predecessor fund also invested in the Canyon Laurel Fund II. The fund’s investor base spans the U.S., Japan, Korea and Australia and includes institutional investors such as public and corporate pensions, endowments, financial institutions and family offices.
Canyon’s direct real estate investment arm, which manages a real estate portfolio of more than $6 billion of project capitalization, had doubled in size in the last few years under the leadership of Potts and Maria Stamolis, co-head of real estate investments.
In November, Canyon acquired a $314 million loan portfolio comprising six senior mortgage loans secured by multifamily, student housing, self storage and senior living properties. The senior loans had floating rate three- to five-year terms and featured average loan balances of approximately $50 million for properties in markets including California, Colorado, Rhode Island, Tennessee and Texas. At that time, Potts stated they were seeing billions of dollars of commercial mortgages coming to the market for sale as lenders were repositioning balance sheets and portfolios due to the pandemic.
More funds and investments
Canyon is also active in the equity space. In early 2020, Canyon announced an additional $375 million investment from CalPERs for its emerging manager program, which Canyon has managed since 2012.
In October 2019, a joint venture between Canyon and AECOM Capital announced the final close of its fund AECOM-Canyon Partners, with more than $500 million in total equity commitments. The fund targets build-to-core investments in the top U.S. markets across a range of property types including office and industrial. Among the fund’s biggest investments is Ivy Station, a 519,000-square-foot, mixed-use development in Culver City, Calif., where HBO has leased all 240,000 square feet of the office space.