Archway Capital, an LA-based alternative investment manager focused on real estate debt investments, announced the launch of the second vintage of its Opportunity Fund strategy.
Archway Opportunity Fund II targets a $100 million raise through the end of 2026. This strategy will focus on a broad investment mandate, enabling the fund to capitalize on debt investments, including senior and junior loans, preferred equity investments, and distressed opportunities/special situations.
The strategy will be deployed across commercial and residential real estate asset classes, including multifamily, retail, industrial, office, and mixed-use assets. And the fund’s target total return is anticipated to be 11% to 15% (annualized, net of fees) with a 4% to 5% current income component (annualized, net of fees). Plus, it will not utilize leverage in the portfolio.
Archway expects a major portion of the funds to be raised through existing limited partners with whom the team has had relationships since its founding.
Archway’s borrowers are experienced real estate entrepreneurs who will execute a short-term business plan to improve the property’s value. As the property’s value improves, the equity cushion protecting the loan increases until the sponsor exits via a traditional refinance or sale.
KEY QUOTES:
“Commercial real estate capital markets have been in gridlock due to the high interest rate environment causing transaction activity to be sluggish. We are in the camp that sentiment across the space is finally changing as transaction volume continues to increase, however, traditional funding sources will be slow to react. Having fresh capital to deploy, our Opportunity Fund II is poised to earn risk-adjusted returns on quality assets where sophisticated borrowers are unable to access credit from traditional lenders.”
Bobby Khorshidi, CEO and CIO of Archway Capital
