Morrison Raises $200M for Mezzanine Debt

The fund provides small-balance mezzanine capital, with investment balances typically ranging from $2 million to $10 million, to CRE market participants across diverse property types in the top 100 MSAs nationwide.

PNC Center, Indianapolis
PNC Center, Indianapolis

Morrison Street Capital LLC of Portland, Ore., has held the final close of its $200 million Morrison Street Debt Opportunities Fund L.P., Morrison Street announced recently.

The fund provides small-balance mezzanine capital, with investment balances typically ranging from $2 million to $10 million, to CRE market participants across diverse property types in the top 100 MSAs nationwide. MSDO’s investments are structured as mezzanine debt, B-notes or preferred equity, depending on a situation’s specific needs.

Morrison Street formed the fund “to capitalize on the current opportunity in the debt capital markets, as well as to leverage its experience as debt and equity investors in the mid-market real estate sector,” according to a prepared statement.

MSDO targets stabilized properties, whether secondary assets in primary markets or prime assets in secondary markets, and provides long-term mezzanine capital for financing gap shortfalls. It does not utilize fund-level leverage.

The fund reportedly attracted capital from existing and new investors, which include pension plans, endowments, foundations, family offices and registered investment advisors, from both the United States and Europe. The company noted that most of these participants have been investors in prior Morrison Street funds.

So far, MSDO has made 21 mezzanine investments that collectively represent about 66 percent of the fund’s total commitments.

Accord Capital Partners LLC, along with its affiliate Accord Europe Ltd., served as exclusive global capital advisor to Morrison Street.

Morrison Street did not respond to Commercial Property Executive’s request for additional information.

Last summer, CPE reported on a significant refinance of a 13-property medical office portfolio owned by Regent Medical Properties. Morrison Street provided a $10 million, five-year, fixed-rate mezzanine loan.

Other recent Morrison Street transactions include an $8.8 million mezzanine loan secured by the PNC Center, a Class A office building in downtown Indianapolis; a $10 million mezzanine loan on 100 East Wisconsin, a Class A office tower in Milwaukee and a $4.5 million B note on the Crate & Barrel headquarters, in Northbrook, Ill.