On April 3, 2017, KKR Real Estate Finance Trust (Pending:KREF), a KKR-managed mortgage real estate investment trust company, filed with the SEC to raise up to $220.3 million through an initial public offering. The company plans to list on the NYSE under the symbol “KREF.”
Company Overview
Founded in 2014, the New York, NY-based company focuses on commercial real estate debt. KKR Real Estate Finance focuses on acquiring and originating senior loans secured by commercial real estate assets as well as preferred equity, mezzanine loans and other debt-oriented instruments. The company’s investment objective is to generate risk-adjusted returns for its stockholders, primarily through dividends, over the long term as well as capital preservation.
Executive Management
Ralph F. Rosenberg joined KRR Real Estate Finance in 2011 and is currently serving as global head of the company. Before taking this position at KRR, Mr. Rosenberg was a partner at Eton Park Capital Management. He also ran R6 Capital Management, his own firm, before choosing to merge it into Eton Park. He was also a prior partner at Goldman Sachs. Mr. Rosenberg earned his MBA from the Stanford Graduate School of Business and holds and undergraduate degree from Brown University.
IPO Details
The REIT plans to offer 10 million shares priced between $20.50 and $21.50 per share, according to its SEC filing. Underwriters will also have a 30-day option to buy an additional 1.5 million shares. If underwriters do exercise this option, and assuming midpoint pricing, KREF will have a market capitalization of $1.1B.
In its statement, the company acknowledges that it plans to fill a market gap caused by restrictive underwriting standards that have created opportunities for well-capitalized alternative lenders and compelled conventional financing sources. The REIT also recognizes an opportunity in the significant number of loans issued during the country’s past financial crisis as they come to maturity and will ultimately need to be recapitalized.
