S3 Capital Announces Final Close of Fund III at Hard Cap, Raising $1.3 Billion of Capital

Fund exceeds target by $200 million, raising $850 million of discretionary capital and $465 million of co-investments

NEW YORK, May 07, 2026 (GLOBE NEWSWIRE) -- S3 Capital (“S3” or “the firm”), one of the most active private construction lenders nationally,¹ today announced the final close of S3 LB RE Credit Fund III (“the Fund”), with $850 million of discretionary Fund commitments and an additional $465 million of co-investment commitments. The Fund closed at its hard cap, exceeding its initial $650 million target. The fundraise brings total investable capital to approximately $1.3 billion and supports expected loan origination capacity of approximately $4.3 billion.

S3 LB RE Credit Fund III is a 6-year closed-end fund focused on first lien construction lending, primarily financing multifamily residential developments in supply-constrained markets. The Fund was raised against the backdrop of a persistent U.S. housing shortage and continued retrenchment by regional banks from construction lending, creating an attractive opportunity for specialized private lenders with sourcing, underwriting, and execution capabilities to provide capital at scale.

Since its initial close in November 2024, the Fund has originated over $2.3 billion of whole loans and has called nearly half of investor commitments. This robust pace of deployment reflects both the need for capital driving the current opportunity set and S3 Capital’s ability to consistently source and execute high-quality investments through long-standing relationships and a deep origination network.

“The opportunity in construction lending today is driven by a clear imbalance between the need for new housing supply and the availability of capital to finance it. While the housing shortage is well understood, bringing new supply online requires lenders with the experience, discipline, and infrastructure to execute through the full lifecycle of a project,” said Robert Schwartz, Co-Founder and Principal.

S3’s vertically integrated platform enables the firm to manage the full lifecycle of its investments from underwriting through repayment. The firm’s 12+ year track record highlights the strength of its platform.

“From the beginning, we built S3 as a real estate firm first. By combining our development background with in-house construction expertise, we can actively manage risk and deliver consistent outcomes,” said Joshua Crane, Co-Founder and Principal. “As traditional bank lenders continue to pull back and many debt funds remain focused on bridge lending, we are seeing a deep and growing pipeline of strong investment opportunities.”

S3 has delivered 43 consecutive quarters of distributions to its investors through this model.

The Fund attracted a diverse group of global investors, including public and private pension plans, insurance companies, family offices, and wealth management firms. Fund III's investor base reflects strong support from existing Fund II investors, complemented by new institutional relationships across North America and abroad.

“This fundraise reflects accelerating demand from investors seeking strategies that can deliver durable current income, differentiated downside protection, and attractive risk-adjusted returns. In an environment where many investors have faced delayed realizations and a lack of distributions, our strategy has resonated given its ability to both deploy capital efficiently and begin returning it within a shorter-duration structure,” added Head of Marketing and Investor Relations, Michelle Fang. “Investors are increasingly looking to partner with focused, specialist managers in segments of the market that require operational expertise to access. We believe construction lending represents a compelling and historically underpenetrated segment of the real estate credit market, and we are seeing that reflected in the growing demand from institutional partners seeking access to this opportunity.”

With a pipeline of almost $1.5 billion in additional loans under deposit today, S3 Capital believes the Fund is well positioned to continue originating high-quality loans that support housing creation while delivering attractive risk-adjusted returns to investors.

About S3 Capital

S3 Capital is a national real estate lender specializing in construction and bridge loans for multifamily development. With experienced and dedicated teams focused on origination, underwriting, and construction management, they take an active and hands-on approach to lending that aims to mitigate risk both before and during the life of the loan. Since launching its credit business in 2013, S3 has originated over 900 loans totaling more than $9.3 billion. With a focus on multifamily residential in and around Tier-1 markets, S3 seeks to achieve equity-like returns that are both resilient and current income-oriented. S3 Capital is wholly owned by Spruce Capital, founded in 2007, which also owns Spruce Properties, an owner of approximately 5,000 multifamily units primarily located in the Midwest and Sunbelt.

Disclosures:

This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. Any such offer or solicitation will be made only by means of the appropriate Fund’s confidential offering documents, including related subscription documents (collectively, the “Offering Documents”) that will be furnished to prospective investors. Before making an investment decision, investors are advised to carefully review the Offering Documents, and to consult with their tax, financial and legal advisors. This document contains a depiction of the activities of S3 Capital (“S3” or the “Firm”), and the funds S3 provides advisory services to (the “Funds”), which are subject to further amendment or modification and is qualified in its entirety by the Funds’ Offering Documents. The Firm’s investment program for the Funds is subject to significant risks. Certain of these risks are described in the Offering Documents.

Do not rely on any opinions, predictions, projections or forward-looking statements contained herein. Certain information contained in this document constitutes “forward-looking statements” that are inherently unreliable and actual events or results may differ materially from those reflected or contemplated herein. S3 does not make any assurance as to the accuracy of those predictions or forward-looking statements. S3 expressly disclaims any obligation or undertaking to update or revise any such forward-looking statements. The views and opinions expressed herein are those of S3 as of the date hereof and are subject to change based on prevailing market and economic conditions and will not be updated or supplemented.

Any reproduction or distribution of this document, as a whole or in part, or the disclosure of the contents hereof, without the prior written consent of the Firm, is prohibited

Performance estimates contained herein are without benefit of audit and subject to revision. Past performance does not guarantee future results. Future returns will likely vary, and investment results will fluctuate.

Media Contacts
Doug Allen/Jansel Murad
Dukas Linden Public Relations
S3Capital@DLPR.com
+1 (646) 722-6530

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1} MSCI, “Capital Trends: US Big Picture”, August 2025

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