July/August 2014 Issue

Refinancing sets up victim of Spanish crash to compete with new REITs, says Doug Morrison

Orion Capital Managers has a loyal fan base among limited partner investors, having raised more than €1bn of new capital for pan-European opportunistic investing during 2012, when few others could. The private equity firm was an early entrant back into the Spanish property market, so its managing director, Aref Lahham, should know his cebollas and is likely to be right when he says […]

Bank of America Merrill Lynch has syndicated around a third of the €130m mezzanine debt secured against the Coeur Défense tower in Paris to Austrian bank BAWAG. BAML underwrote a €935m whole loan in February for Lone Star’s €1.35bn purchase of the iconic building. The five-year financing was structured as a senior loan with a 60% loan-to-value ratio and a mezzanine facility with an LTV […]

Secondary sales by foreign banks add to wave of domestic debt deals, reports Lauren Parr Activity in Spain’s distressed debt market is picking up, representing 43% of total planned real estate loan sales by banks across Europe this year, according to Cushman & Wakefield. Foreign banks exiting the market have been a growing source of opportunities for loan buyers. Commerzbank’s Project Octopus sale last […]

First-movers line up to cash in on Italian banks’ bad loan clear-out, reports Alex Catalano Italy is the new Spain for real estate debt investors. International capital is circling around the country, looking to swoop on distressed non-performing loan portfolios and real estate. The early movers are all there: Fortress, Cerebus, Blackstone. “Over the past six months sentiment has been improving,” says Gennaro […]

US developer Larry Silverstein is seeking up to $1.6bn in financing to complete 3 World Trade Center, now that an agreement brings new life to the stalled tower. After months of talks, Silverstein and The Port Authority of New York and New Jersey reached an agreement that frees up $159m in insurance proceeds to resume construction on the tower in the new […]

Pbb head steps down Manuela Better, chief executive of pbb Deutsche Pfandbriefbank and Hypo Real Estate, resigned last month after the German government blocked the sale of the group’s Depfa bank, which makes public-sector loans. Better said she saw no “basis for carrying out the duties of my office” after banking agency SoFFin said Depfa would be wound down instead. SoFFin’s U-turn throws into doubt next […]

Sun, sea and loan sales: investor interest shifts to southern Europe, writes Federico Montero

UK market overview, June 2014 In May, average secondary market pricing inched in by 0.10% to an average discount to net asset value of just 0.22%, writes Ashley Marks. Pricing improved due to strong demand for shopping centre and retail warehouse funds, as valuations improve. There was slight downward pressure on office fund pricing due to lack of demand, caused by structural uncertainties […]

Debt asset manager AgFe has raised £1.4bn of capital for investment in senior commercial mortgages in two new UK funds and is on course to raise £2bn. Retirement specialist LV has mandated AgFe to put up to £1bn into investment-grade mortgages over the next four years in the friendly society’s first move into senior property debt. AgFe will originate fixed-rate, five to 20-year, bilateral loans […]

Real Estate Capital market commentary Lending to alternative sectors represented a notable part of the UK deals that took place in June, as lenders spread beyond highly competitive areas of financing and move up the risk curve. Seven deals featured either residential, healthcare, student housing or hotels, several with a development angle. Lloyds’ £30m revolving debt facility for housing association Pocket Living […]

PERE Research and Analytics’ monitoring shows there are 57 real estate debt funds in the market this month, seeking to raise $30bn for the asset class. There are two new US entrants, G4 Capital Partners, seeking to raise $200m, and Värde, whose $500m Scratch and Dent fund aims to acquire whole mortgage, bridge and mezzanine loans, as well as […]

TIAA Henderson Real Estate has beefed up its European debt investment team ahead of unveiling its maiden debt fund in the next few weeks. The new fund will offer borrowers whole loans on UK property with loan-to-value ratios up to 75%. To generate 7% returns, THRE’s debt team will have the option to syndicate the super-senior portion of the loans it makes, typically the first 35% LTV […]

The enthusiasm of the authors of A vision for real estate finance in the UK is evident, but the strength of their proposals is not. A summary of the report in the Bank of England’s May paper Should the availability of UK credit data be improved? asked for views on the costs and benefits of the proposals. The industry, lenders and borrowers must take […]

Anticipation of interest rate rise takes edge off delegates’ enthusiasm, writes Al Barbarino

Fierce competition may be encouraging risky rating agency behaviour, writes Al Barbarino

Deals involving UK secondary and Italian assets achieve keen pricing, reports Lauren Parr

With assets Spanish assets hard to find, overseas players are backing IPOs.

Former DB duo Ismael Clemente and David Brush launch largest Spanish flotation since 2011