King Street Capital Management announced the final closing of its European Real Estate Special Situations Fund II (ESS II), hitting a hard cap of about $950 million of capital commitments within a year.
This fund will invest across core markets in Western Europe, focusing on assets that are temporarily mispriced due to market illiquidity rather than fundamentals. Utilizing King Street’s ability to invest across the capital structure, ESS II offers flexible, asset-specific capital solutions tailored to borrower needs, with a focus on unlocking value through capital structure solutions, repositioning, and hands-on asset management.
ESS II attracted a globally diversified investor base across North America, Europe, Asia, and the Middle East, with 50% of commitments coming from re-ups of the firm’s predecessor, ESS, and existing King Street real estate investors.
The closing of ESS II marks a significant milestone in the growth of King Street’s real estate platform. Recent investments include the Four Seasons Rome, the Bauer Hotel Venice, Room00, Arlington House St. James, and Bravo! Students, demonstrate the team’s conviction in structurally resilient sectors with long-term secular growth.
KEY QUOTES:
“The strong investor demand for ESS II reflects confidence in King Street’s ability to deliver innovative financing solutions in a market where transparency and liquidity remain scarce. Amid historic dislocation, we see a clear path to recovery and believe ESS II is well-positioned to capitalize on a generational opportunity in European real estate.”
Brian Higgins, Founder and Managing Partner of King Street
“Our strategy focuses on the intersection of quality and complexity, providing capital solutions for trophy assets trading below intrinsic value due to market stress. As traditional lenders pull back and capital remains scarce, we’re able to deploy flexible capital and access landmark assets through proprietary, off-market channels.”
Paul Brennan, Partner and Co-Head of Real Estate responsible for leading the European business at King Street
