The November Kirkland Income Fund results ended strong. With increased efficiency of utilized capital, cost controls, and continued performing status of our portfolio loans the fund reported its strongest month yet with a net return to investors of 0.85%. Acceptance to an institutional investment platform has increased new investor capital. Investor interest has continued to grow as the fund continues to perform well. We are looking forward to a strong 2021.

Many major Real Estate services are posting data and of course none of them have the same numbers. This is common in most data and indices created to track occurrences in a variety of markets. One must remember one of the reasons bridge financing exists is the fragmented commercial lending industry. This fragmentation is a major driver to why you can read one article that claims everything seems stable in real estate, then a different report which shows dramatically worse metrics. The “facts” of the data depends on where one is looking, and the attribution of the factors being tracked.

The multifamily sector continues to show resiliency. Vacancy rates have only risen 0.6% year over year to a current 4.6%. Rental rates have softened only 0.6% year over year as well. Most of this rental softening has been seen in the coastal cities while less expensive markets have shown stabilization.

But, just like those trick or treaters, we are wondering what's behind the door.

Relative to its peers and in a measure of absolute return the broad REIT market has had its worst performing period in 10 years. Regardless of this negative event, commercial real estate debt funds focused on multifamily have been performing well and continue to receive requests for loans that are supported by solid properties and borrowers. We at Kirkland Capital Group are on our toes and ready to move as a reversion in the coming years will certainly create more opportunities.

July has been an amazing month with increased deal flow from multiple sources. Kirkland Capital Group closed another loan with many more in the pipeline. Buyers and investors in the small balance commercial real estate arena have come out strong, and according to many of the brokers in our network they are seeing more activity that will certainly carry into the months to come. In lock step KCG has had more interest from investors as well.