KNCT Lending launches second real estate debt fund

Chicago-based Konnect Real Estate has initiated a second privately held real estate debt fund, KNCT Lending II, which will again focus on short-term, event-driven, time-sensitive transitional capital.

The fund’s goals are to provide real estate owners, investors and operators with flexible, creative and reliable short-term lending solutions; accelerated term sheet delivery and a swift approval process; low loan minimums and quick closings.

Lee Kotler, president of Konnect Real Estate, said his experience with the first fund, along with his history as a local real estate investor and operator gives the fund and its borrowers a strategic advantage in understanding transactions that may involve complex turnarounds, re-positioning, re-tenanting or environmental issues as well as constantly evolving exit strategies.

“We wanted to expand our platform to provide capital in an area where other lenders aren’t necessarily comfortable with the myriad of complexities that can come up in commercial real estate transactions, especially on loans less than $2 million,” Kotler said. “In conjunction with the uncertainties in the real estate market now as a result of the COVID-19 pandemic, we have the experience and creativity to work towards an accretive solution for our borrowers, in order to get their property to the next phase, whether that is getting it acquired, positioned for sale or ready for permanent debt.”

KNCT’s three most recent transactions feature a variety of owner/user and single tenant properties along with a residential property. All are located in the greater Chicagoland area with local ownership.  The average deal size was around $500,000 and transactions were closed within a few weeks. Each transaction was specifically structured to meet the borrower’s business plans.

“Obviously, the COVID-19 pandemic has caused a tremendous amount of change and uncertainty not only in the economy and but the commercial real estate market in general,” Kotler said. “There is still so much unknown in terms of how things will look when we get through this crisis.  It is important to note that certain elements of the real estate market and real estate uses may change. Habits and behaviors of owners, investors and lenders will be different.”