K
KR & Co. has successfully raised over $850 million for its opportunistic real estate credit fund, capitalizing on a prime moment to finance property deals as investors sense a turning point in the market. The vehicle, KKR Opportunistic Real Estate Credit Fund II, will focus on backing first mortgages secured by high-quality properties in the US and Europe, as well as purchasing select tranches of commercial-mortgage backed securities.

    With commercial-property values believed to have hit bottom, KKR is poised to lend against appreciating assets. The firm's head of real estate credit, Matt Salem, notes that an increase in transactions and a pullback in bank financing have fueled landlords' demand for private credit, creating opportunities for deals with an attractive balance of safety and potential returns.

    KKR is targeting borrowers who own solid properties but face short-term challenges, such as multifamily or industrial buildings in markets experiencing new supply. These owners aim to navigate the next two to three years before potentially selling into a more favorable market environment.