RCG Longview Remains Positive, Closes Fourth Debt Fund at $602M

The list of real estate debt investors daunted by the frosty lending climate is a long one, but New York City-based RCG Longview is not one of them. The real estate opportunity manager has closed RCG Longview Debt Fund IV L.P., having raised $602.5 million in equity. Like the previous three investment vehicles, Fund IV will target a variety of real estate transactions ranging from bridge loans and mezzanine loans to bridge mortgages and preferred equity opportunities across the country. In terms of leverage for purchasing, given that RCG Longview typically plays a mezzanine role, which is usually 10 to 15 percent, there will be approximately $4.6 billion that the fund will be financing with the raised equity. “Our commitment from investors provides us with an investment period which is four years; during that period, as capital comes back we can reinvest it,” David Valger (pictured), RCG Longview director, told CPN. “We’re talking about a significant amount of activity in terms of real estate capitalization.” RCG Longview, which is controlled by investment advisor Ramius L.L.C. and commercial real estate owner and manager The Feil Organization, kicked off the RCG Longview Debt Fund series in 1999. The third in the series, Fund III, closed in 2004 with $292 million. All told, over $2 billion has been put in play via the first three funds. Needless to say, the current market is, to put it mildly, not what it was in 2004, but RCG Longview is undeterred. “Our perspective on the opportunity to invest in real estate hasn’t changed,” Valger noted. “What has changed are our more conservative underwriting of pro formas, the incoming and outgoing cap rate and our expectations of exit scenarios.” RCG Longview remains positive–but not oblivious. “We’re very concerned about what’s going on in the market and we watch it closely, but we will continue to try to find good opportunities in today’s market reality, as opposed to yesterday’s market reality.” Indeed, times are a changing. “Sellers are becoming more realistic about cap rates and buyers are becoming more realistic in terms of how much financing they can get and what that may cost today.” For its part, Valger said, RCG Longview, “will continue to work with brokers and the senior lending community to find transactions that make sense.” Established nine years ago, RCG Longview has made over 450 investments secured by more than $15 billion in real estate.