SL Green Realty Corp. raised $250 million from Canadian pension fund Caisse de Depot et Placement du Quebec for a new opportunistic debt vehicle, according to people familiar with the matter.
SL Green is targeting roughly $1 billion in total for the fund, which was announced earlier this year and will focus on distressed credit opportunities in New York’s office and retail sectors. The real estate investment trust is also set to close a second round for the fund before the end of the year, which would bring the total amount raised to just over $500 million, the people said, asking not to be named citing private details.
The REIT announced the $250 million pledge in a statement Dec. 5, saying only that the commitment came from a Canadian institutional investor. A spokesperson for CDPQ declined to comment.
“We look forward to deploying SL Green’s fully integrated platform and New York market expertise to capitalize on a robust pipeline of investment opportunities at attractive risk-adjusted returns,” Harrison Sitomer, SL Green’s chief investment officer, said in the statement.
Investors are seeking to raise more capital to seize on opportunities in the commercial-property market as high interest rates weigh on valuations. Some are focusing on the credit market, where banks have pulled back at a time when maturing loans need to be refinanced.
The debt fund is “the only one of its scale that is entirely New York City centric,” Chief Executive Officer Marc Holliday said during the company’s first-quarter earnings call. It “will allow us to capitalize on current capital market dislocation, through the discounted acquisition of existing debt investments and the origination of new high-yielding debt instruments.”
