Christian Candy’s Omni Capital has provided a £48m bridging loan to fund the acquisition of a residential development site in Chelsea Harbour, west London. The loan has been issued to the Hadley Property Group, which is backed by the multi-family office the LJ Group and private family office the Peterson Group. The site, known as […]
TIAA-CREF has provided a $175m fixed-rate loan to Clarion Partners’ Lion Industrial Trust Fund. The 10-year loan will be used to retire the existing debt on a seven-property, five-million-square-foot industrial portfolio that includes two assets in San Bernardino, California; four in Dallas, Texas; and one in Southaven, Mississippi. Constructed between 2001 and 2005, the portfolio […]
Lloyds Banking Group has reduced its UK “bad book” by £2.5bn in the first six months of this year through consensual agreements with customers, loans sales and asset disposals. In its half year results released today it said the portfolio “continues to reduce significantly ahead of expectations” and that, subject to rounding, that the UK […]
Kroll Bond Rating Agency has issued a pre-sale report on Blackstone’s third securitisation of single family rental homes, noting that the $720m Invitation Homes 2014-SFR2 has the highest LTV of any of the five previous SFR transactions.
Kroll assigned the $322.6m top tranche a “AAA” rating (see chart for full ratings), in addition stating that based on the portfolio’s aggregate brokers' valuation the securitisation has a 79% LTV – higher than the previous 65% to 75% range among five previous SFR deals.
The LTV based on KBRA’s stressed valuations is 85.3%, well above the previous 72.1% to 81.9% range and 79% average.
“Higher leverage generally implies less borrower equity, greater likelihood of default, and higher overall loss severity in the event of a default,” according to the report.
Blackstone included Class G certificates as a risk retention class (by increasing the overall size of the loan with an interest-free component) in order to comply with European Banking Authority regulations, requiring the sponsor to retain 5% of economic interest in the capital structure.
But “while risk retention can be viewed as a credit positive, KBRA does not believe it mitigates the impact of increased leverage, as the entire loan proceeds will need to be refinanced at maturity,” Kroll said.
Nitin Bhasin, a Kroll managing director on the team that prepared the report, said the stresses applied to the securitisation -- 95% default stresses and 50% home decline stresses at the AAA level -- account for the increased leverage.
"It's very common to have different LTVs based on borrower preference," he said. "Our models are built so that every particular nuance or change in metrics is taken into account."
Though a number of metrics beyond LTV would be taken into account, Bhasin didn't rule out the possibility that significant further upticks in LTVs on subsequent SFR securitisations could lead Kroll to not rate the securities. In this case, he noted that Kroll did not rate Class G.
The Kroll report was issued just days after Jonathan Gray, Blackstone’s global head of real estate, reportedly said at a New Jersey State Investment Council meeting that Blackstone plans to exit the business through an IPO in the coming years. The company had alluded to this in the past.
Invitation Homes 2014-SFR2 marks Blackstone’s third SFR securitization, the most recent being May’s $993m Invitation Homes 2014-SFR1, which is the largest SFR deal to date.
There have been six total SFR securitizations so far including Invitation Homes 201-SFR2, between Blackstone, American Homes 4 Rent and Colony American Homes, with a number of additional SFR owners looking to enter the market soon.
Major institutional buyers spent as much as $25bn plucking some 200,000 properties out of foreclosure since the recession. Blackstone began buying when home values were down between 35% and 40%, acquiring more than 40,000 properties in markets that were well positioned for a strong recovery, the company has said.
Deutsche Bank may reportedly start marketing 2014-SFR2 to investors this month.
Kennedy Wilson Europe Real Estate has agreed a deal to buy a portfolio of loans secured against Irish real estate for €75m. The loans are being sold by Royal Bank of Scotland’s Irish subsidiary Ulster Bank. Known as the Elliott Portfolio it includes loans held against 13 assets. The three largest, which make up around […]
Barclays has issued a £56m development finance package to HFD Group for its pre-let CityPark project in Aberdeen. The facility will be used to build out a 215,000 sq ft office building in the Altens area of the city. The building has been let for 50 years to oil and gas company, Wood Group at […]
Oaktree Capital Management has begun a search for around £350m of debt for its purchase of three business parks from MEPC. The US private equity firm agreed a deal earlier this month to buy the parks alongside asset manager Patrizia for around £435m. It is looking for around an 80% loan-to-value arrangement which could be […]
Pricoa Mortgage Capital has completed its first deal in Germany. The commercial mortgage lending arm of Prudential Finance has provided Hines Global REIT with a €36m facility to purchase a 56,500 sq m logistics property in Forchheim near Nuremburg. The building is fully let to third party logistics provider Simon Hegele. Around 20,000 sq m […]
Los Angeles-based alternative investment firm Thorofare Capital has raised $200m for Thorofare Asset Based Lending Fund III in less than eight months.
The firm said it has another $50m “soft-circled” to reach the $250m goal by year-end. It will cap commitments at $300m.
Fund III had its first closing in November and has invested approximately $90m in transactions, making new senior debt investments between $2m and $25m in opportunistic, distressed and value added commercial real estate.
Kevin Miller, CEO of Thorofare Capital, said in a written statement that Fund III is “positioned to continue to close loans quickly in order to help borrowers finance opportunistic acquisitions, recapitalizations, discounted pay offs, note acquisitions, and other special situations such as open-bid auctions.”
The firm’s previous fund, Thorofare Asset Based Lending Fund II, originated approximately $230m in loans and has realized over 60% of invested capital since the end of its investment period in December.
“The support of our L.P.s, represented by a recommitment rate north of 90%, has been vital to the success of both the firm and our current fund,” Miller said.
Thorofare, which specializes in commercial real estate bridge loans, has closed 90 transactions nationwide totaling $350m of unlevered equity capital since it was founded in 2010.
Deutsche Bank, HIG’s Bayside Capital and private equity firm AnaCap Financial Partners have together acquired a €495m non-performing and underperforming loan portfolio backed by Romanian property in one of the first examples of loan buyers moving outside overcrowded European markets. The portfolio consists of 3,566 non-performing and under-performing loans secured against residential, retail and other commercial […]