Morgan Stanley Investment Management (MSIM) is buying US real estate debt specialist Mesa West Capital.
Mesa West, which manages close to $5bn (鈧�4.25bn) in assets, will retain its brand and operate as a separate business unit within MSIM鈥檚 $47bn Real Assets group.
The company鈥檚 headquarters will remain in Los Angeles, and Mesa West senior management, led by co-founders Jeff Friedman and Mark Zytko, will continue to manage the company on a day-to-day basis.
Dan Simkowitz, head of MSIM, said: 鈥淢esa West is a perfect addition to our suite of strategies across real assets and private credit.鈥�
MSIM is moving into the US real estate debt funds sector at a time of growth. , growing demand from institutional investors has sparked a proliferation of new funds and strategies.
In the latest edition of the magazine, Ryan Krauch, a principal at Mesa West Capital, told 91传媒在线 that investors are becoming cautious about commercial property values and debt is increasingly being seen as preferable to equity as a way to invest in the market.
鈥淥ur investors understand that they can often achieve better going-in yield and average cash-on-cash returns by lending on high-quality assets than they can by buying them, while at the same time being in the most senior position of the capital stack,鈥� Krauch said.
The transaction is expected to close in the fourth quarter.
