Grass River Capital

Overview & Investment Strategy

Grass River Capital houses Grass River’s investment management, loan origination, and asset service activities in commercial real estate debt markets.  Strong CRE fundamentals, widespread borrower dissatisfaction with CMBS, and the dislocation of many CRE lenders’ operations by new government regulatory and capital restrictions provide a generational opportunity to build a powerful CRE debt investment, origination, and services platform.

Led by Managing Partners Justin Kennedy, Toby Cobb, and Jonathan Roth, Grass River Capital targets attractive risk/reward investments in first-lien commercial real estate debt amid market dislocation driven by broad market volatility and transformative new regulations in addition to opportunistic situations where inefficiencies are common regardless of market cycles.

  • Strong CRE fundamentals offer favorable risk/reward amid debt market dislocation driven by macro volatility and new regulation
  • Principals are 25+ year veterans with strong track records in CRE debt markets where incumbent lenders face regulatory upheaval
  • Vertically integrated origination & servicing modeled on best practices of traditional lenders to mitigate risk and enhance returns
  • Targeted asset sourcing driven by long-term borrower relationships, hands-on diligence and intense cash flow underwriting
  • Conservative risk control practices emphasizing continuous borrower interface, high-touch asset management and loan servicing

Market Opportunity

  • Macro uncertainty and lender constraints have muted building since 2010 leaving CRE market with strong cash flow fundamentals
  • $1.1 trillion in 2016-18 maturities* sharply increase lending demand; over-levered 2006-08 loans require specialized capital
  • Favorable competitive environment: banks originating 47% of 2007 CMBS** and nearly all foreign banks have exited the market
  • New regulatory and capital rules constrain credit formation and force many incumbent lenders to alter current lending practices
  • Strategy and capabilities designed to control risk and exploit opportunities as markets evolve in the new regulatory climate