Report: Deer Park Road Launches $500M Distressed Commercial RE Fund

Deer Park Road Management is fundraising on a $500M strategy targeting distressed commercial real estate opportunities, CIO Scott Burg told Bloomberg on October 7.

The recent period of higher interest rates have hit valuations and set off a raft of commercial real estate defaults, making lenders more willing to dispose of higher quality assets, a situation the Steamboat Springs, CO-based hedge fund hopes to take advantage of, Burg said, noting that valuations are in some cases down 60% to 80% from when many such loans were originated.

The $500 million fund is offering an 8% hurdle rate, and the launch follows on from statements Burg made in May following the successful $165M launch of Deer Park’s Mortgage Opportunity Fund I, which targeted opportunistic investments in residential mortgage-backed securities (RMBS). “After the successful launch of our RMBS-targeted fund, we are also seeing similar opportunities present themselves in the distressed commercial mortgaged-backed (CMBS) sector,” Burg said at the time.

Source: https://www.bloomberg.com/news/articles/2024-10-07/hedge-fund-deer-park-eyes-distressed-property-debt-in-2009-rerun?cmpid=BBD100724_CUS