Keelbase Capital, a Seattle-based real estate investment firm, has launched a strategic focus to capitalize on an emerging trend in major U.S. markets: systemic overleverage, driven by depressed asset values and the rebound from a period of near-zero interest rates.

Keelbase Capital plans to deploy $125 million to $250 million in private credit over the next three years and pursue $200 million to $300 million in joint venture acquisitions. “We founded Keelbase Capital to meet the moment,” said Cooper Engst, Keelbase co-founder and principal, who spent the past 20 years in institutional capital markets and commercial real estate development, most recently at Eastdil Secured, where he led their Pacific Northwest multifamily practice.

Between 2019 and 2022, more than 1,900 multifamily properties in the Seattle MSA were acquired, refinanced, or developed during a period of historically low interest rates. Factoring in retail, industrial, and office assets, those figures grow to 3,800 properties with a combined value of approximately $105 billion, much of which is overleveraged today.

“Seattle is one of the most dynamic and fundamentally sound real estate markets in the country, but it’s also one of the most exposed to the reset now underway,” said Paul Roeter, co-founder and principal at Keelbase Capital. Roeter has nearly two decades of experience, most recently co-leading the Pacific Northwest Equity, Debt, and Structured Finance practice at Cushman & Wakefield.