CDMX Participating Debt Fund I
New Harbor RE (NHRE) has raised a US $50MM Private Credit Real Estate fund focused on providing secured participating debt to residential developers in Mexico. The fund is immediately placing US $36MM as secured participating debt in 4 residential projects in Mexico City. The remaining commitment will be called within the next 12 - 18 months to invest in new participating debt opportunities and ones in the pipeline.
NHRE has taken the opportunity to replace the existing cash flowing senior or mezzanine debt on 4 projects underway, with maturities ranging from 18 to 36 months. These debt instruments are currently paying interest monthly and provide an IRR participation look-back upon maturity. All borrowers are current on their payments. These projects all have significant equity invested and are projected to achieve attractive returns. NHRE will pay a quarterly preferred return of 8% p.a. and is targeting an overall return of 17% to 20% IRR gross.
NHRE’s capital is secured by a first or second mortgage position on the property depending on construction financing. The property and mortgage are be held in a guaranteed trust (Fideicomiso) structure – the typical lending structure in Mexico which provides for tax benefits and expedited remedies in the event of default.