Goldman Sachs Group Inc. has now raised $2.4 BILLION for its second real estate debt fund at a time when several private equity funds and real estate investment trusts have entered the property lending business.
The firm says it raised $1.8 billion from investors and put in $600 million of its own money. The fund plans to borrow an additional $1.8 billion, making $4.2 billion available for senior mortgages and junior loans.
In marketing material for the fund, Goldman told investors last fall that an estimated $14 trillion in commercial real estate debt was set to mature over the next five years.
Fund documents said there are fewer real estate lenders than in the past and that some of the active lenders have a "lower risk tolerance."
Goldman officials say they have lent about $500 million from the fund, including for a southern California office portfolio and toward the conversion of rental apartments to condominiums in New York.
financial legislation limits banks from putting more than 3% of the total
capital into certain high-risk funds, Goldman officials said that the debt fund
was exempt from the new rules which allow for certain lending activities and
real estate investments.
Lake Okanagan Realty
506 Doyle Avenue
Kelowna, BC V1Y 6V8