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North River's Kaye

'The discounts being offered right now do not make sense to us on a total return basis, so we are focusing on A notes and whole loans.'

By Erika Morphy | Updated on June 22, 2008

Locally-based North River Investment Management LLC recently launched its first commercial real estate private equity fund, North River Opportunity Partners I LP, with $100 million of committed capital. Like many funds that are pursuing opportunities in the global credit markets, it wishes to remain flexible to pursue more than one strategy, says Jonathan Kaye, co-founder of North River. So for the moment, he tells GlobeSt.com, it has opted to buy discounted pools of commercial mortgage debt and to originate first mortgage and mezzanine loans on high-quality commercial real estate properties.

GlobeSt.com: What led you to conclude that these routes are the optimal strategy for North River at this point in the market?

Kaye: We started closed on the fund in April and opened our doors in May. Since then we have taken quick survey of what is on offer from financial institutions for purchase and concluded that, for a fund like us, a lot of notes and mortgages are still expensive relative to the underlying economic value of the debt on the property.

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