KKR fund provides mezzanine loan for Chicago multifamily property

KKR Real Estate Select Trust provides mezzanine loan for Chicago property
Image: Courtesy of KREST

KKR Real Estate Select Trust (KREST) has provided a $65m mezzanine loan to Crescent Heights, an urban real estate firm, to support the refinancing of NEMA Chicago, an 800-unit luxury residential building located in the heart of Chicago’s South Loop.

KKR said this represents its first debt investment through KKR Real Estate Select Trust.

Built in 2019, NEMA Chicago is the tallest multifamily residential apartment tower offering unobstructed views of Grant Park, Lake Michigan and the Chicago skyline, as well as convenient access to Chicago’s downtown employment centers and nearby universities.

The 76-story property features 71,000 square feet of state-of-the-art amenities and finishes, including indoor and outdoor pools, extensive fitness facilities, conference meeting spaces and a diverse mix of units.

“We are thrilled to build on our longstanding relationship with Crescent Heights and participate in the refinancing of this premier property as it enters into the next phase of its business plan,” said Matt Salem, KKR Partner and Head of Real Estate Credit. “NEMA Chicago is delivering a luxury live and work experience that is in high demand and we believe the property is well positioned for continued growth and outperformance.”

“KKR has been a trusted lending partner to NEMA Chicago and multiple phases of its lifecycle. We are appreciative to KKR’s entire team for their capital flexibility,” said Casey Klein, Crescent Heights Managing Director.

Real estate debt is one of KREST’s three primary investment strategies, alongside equity investments in stabilized real estate and prime single tenant properties. KREST targets private debt opportunities including real estate loans, preferred equity or commercial mortgage-backed securities (CMBS) with a focus on attractive yield supported by underlying properties with consistent and defensive cash flow.

“KREST’s first investment in a mezzanine loan is representative of the real estate credit component of KREST’s strategy: attractive yield backed by strong sponsorship and a best-in-class asset in a top market,” said Billy Butcher, Chief Executive Officer of KREST and Chief Operating Officer of KKR Global Real Estate. “We are excited to enhance and further diversify our portfolio with NEMA Chicago, which was facilitated by the strong relationship between Crescent Heights and our credit team.”

KKR Real Estate Select Trust Inc. is a registered closed-end fund that thematically invests in high quality, stabilized, income-oriented commercial real estate equity and debt.