Archway Capital LLC, a Los Angeles-based alternative investment manager focused on real estate debt investments, has announced the launch of the second vintage of its Opportunity Fund strategy. Archway Opportunity Fund II is targeting a $100 million capital raise through the end of 2026. The strategy will focus on a broad investment mandate, allowing the fund to capitalize on debt investments including senior and junior loans, preferred equity investments, and distressed opportunities/special situations.
The strategy will be deployed across a combination of commercial and residential real estate asset classes nationwide, including multifamily, retail, industrial, office, and mixed-use assets. The fund’s target total return is anticipated to be 11% to 15% (annualized, net of fees) with a 4% to 5% current income component (annualized, net of fees). Additionally, it will not utilize leverage in the portfolio.
Archway expects a significant portion of the funds to be raised through existing limited partners the team has had relationships with since its inception.
“Commercial real estate capital markets have been in gridlock due to the high interest rate environment causing transaction activity to be sluggish,” said Bobby Khorshidi, CEO and CIO of Archway Capital. “We are in the camp that sentiment across the space is finally changing as transaction volume continues to increase, however, traditional funding sources will be slow to react. Having fresh capital to deploy, our Opportunity Fund II is poised to earn risk-adjusted returns on quality assets where sophisticated borrowers are unable to access credit from traditional lenders.”
Archway’s borrowers are primarily experienced real estate entrepreneurs who will execute on a short-term business plan to improve the value of the property. As the value of the property improves, the equity cushion protecting the loan increases until the sponsor exits via a traditional refinance or sale.
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