Diamond Realty raises $167m for fourth fund

Diamond Realty Management has launched DREAM Mezzanine Debt Fund IV and has raised $167 million in equity commitments thus far.

The fund specializes in mezzanine debt collateralized by real estate development projects in Japan. DREAM will manage the fund, and Mitsubishi Corporation Group will provide the real estate management.

The fund will target a loan-to-value ratio of each asset under 50–70 percent and a loan-to-cost ratio under 60–75 percent, which is expected to provide a return higher than the average dividend yield of J-REITs and private REITs with limited risk of principal loss.

And, by investing in development project debt rather than existing property debt, DREAM is expected to offer investors attractive opportunities under the current competitive Japanese real estate finance market.

The fund is the fourth mezzanine debt fund by Diamond Realty Management, following DREAM Mezzanine Debt Fund I launched in October 2011,