Bain Capital Credit and commercial property debt platform SKW Funding have teamed up to invest $500m (€445.8m) in opportunistic US real estate loans over the next two-and-a-half years.

In a statement, the companies said the newly formed joint venture, which targets sub- and non-performing notes, has acquired a $27m portfolio of four non-performing notes secured by 652 garden-style apartment units in San Antonio, Texas.

The joint venture will seek opportunities nationally, with a focus on acquisitions in the greater New York City market.

SKW Funding and Bain Capital Credit will also target special situation loan originations including mezzanine and preferred equity investments, the companies said.

Ayush Kapahi, principal at SKW Funding, said: “With the slowdown in transaction volume and the recent rent law changes in New York City, we see this as an ideal time to provide solutions to borrowers looking for structured capital, and to lenders looking to sell off their assets/loans due to market conditions and regulatory pressure.”

Jeff Robinson, a managing director and global head of Bain Capital Credit’s distressed and special situations group, said: “While the US real estate capital markets remain robust, we are seeing idiosyncratic, borrower-driven distressed situations and signs of late-cycle lender fatigue that we believe will lead to increased opportunities in non-performing loans.”