June 2014 Issue

With De Montfort University’s Commercial Property Lending Report and our Laxfield Barometer issued recently, there is plenty of data on deals closed and borrower requests in the UK property lending market. But what seems to be missing is an accurate picture of the total amount of capital coming into this market.The sources of capital are […]

UK MARKET OVERVIEW Average secondary market pricing continued to improve in April, by 0.11%, to an average discount to NAV of just 0.32%, writes Ashley Marks. This was due to strong demand and limited supply in the balanced and industrial sectors, with further improvement expected in valuations. Office funds pricing shifted outward as buyers readjusted […]

Real Estate Capital market commentary Standard Life Investments has made its first UK loan since launching its commercial real estate debt business in September. It bought into a £143m Helaba deal, taking a £50m share of a loan secured against a portfolio of warehouses owned by UK REIT LondonMetric. Morgan Stanley has been rebuilding its […]

Investors welcome single-family rental-backed bonds, despite risks, writes Al Barbarino

First English law decision deals with replacing special servicers, reports Jane Roberts The procedure for replacing a special servicer in a European CMBS deal has been clarified for the first time in a high court judgement relating to the distressed £1.17bn Nursing Home Properties and Southern Cross Libra loan. The judgement, delivered in April, deals […]

Agency’s report allows investors to compare top CMBS issuers, writes Alex Catalano CMBS issuance is booming in the US. Some $80bn of commercial mortgages, including loans for multi-family properties, were packaged up as CMBS last year – an 118% increase on 2012 – and this year looks to be similar.  “A big part of the growth […]

Underwriting terms are laxer, but have yet to hit the lows of 2007, writes Alex Catalano The US CMBS market is gathering speed. From near-death in 2009, new issuance has picked up and is on track to hit $100bn this year. But what is also evident is a slide in underwriting standards. “We hear from originators […]

Complexity of ownership deters some firms from revisiting CMBS, writes Lauren Parr

Big-bank issues should meet investor demand later this year, reports Lauren Parr To anyone outside the investment banks, or their close advisers, the European commercial mortgage-backed securitisation market may appear to have stalled – again. Last year it had looked like recovering, with more than €8bn of transactions, aligning it with 2003 issuance levels. Banks […]

Wider range of lenders have growing real estate debt appetite, reports Alex Catalano

Deutsche Bank and Crédit Agricole CIB are working on a possible securitisation of Westfield Stratford, the East London regional shopping mall. The potential CMBS would refinance a £550m secured loan which was taken out in 2011 by Australian shopping centre giant Westfield and ownership partners Canada Pension Plan Investment Board and Dutch pension fund manager APG. […]

Bigger slice of total debt now targets acquisitions and small deals, writes Alex Catalano The UK investment market is picking up speed, with more borrowers seeking acquisition-related financing, especially for smaller-sized loans and retail, according to Laxfield Capital’s debt barometer. Refinancing makes up a decreasing share of the £12.9bn of loan requests for senior and […]

Bank adds $600m to $1.8bn raised for Broad Street debt vehicle with wider remit Goldman Sachs is continuing to bet on real estate debt, closing its second real estate credit fund raised since the global financial crisis and making a hefty contribution from its own balance sheet. The global investment bank raised $1.8bn for Broad Street […]

Big new funds may replace councils’ old pension property strategy, writes Doug Morrison Fund managers with UK local authority pension scheme mandates are facing far-reaching changes to the way they do business, following government proposals to cut investment management costs. A major casualty of the proposed reforms is likely to be the fund-of-funds financial model, which […]

Renshaw Bay raised more capital for its European Real Estate Finance Fund, taking the total to £270m. The boutique firm, where former JPMorgan banker Jon Rickert is head of real estate finance, has made six loans for the fund in the past year. Renshaw also invests in senior debt for Guardian Financial Services, after winning […]

Dutch pension fund investment manager APG is doubling its commitment to UK residential lending via its fund with LaSalle, Residential Finance 1, which is now fully invested.  A £202m second tranche of capital takes the ungeared fund to £440m. It lends at loan-to-value ratios of up to 80% on refurbishment and development.

GE Capital Real Estate has underwritten £300m of business so far this year, its latest deal being a loan to Starwood Capital secured on a hotels portfolio. GE provided a five-year, 65% loan-to-value facility including a £9m capex line for Starwood’s £92m purchase of five Four Pillars hotels in Oxfordshire and the Cotswolds. Other deals include […]

Helaba joins with Standard Life for UK loan, ERGO lends with pbb in Germany

WEBSTER JOINS LONE STAR Catherine Webster is leaving TIAA Henderson Real Estate (THRE) to join Lone Star’s European funds. She was head of real estate senior lending for the TIAA-CREF account in the UK. Webster is Lone Star’s second recent senior European recruit, following the appointment of Stephan Ohlmeyer as a managing director. THRE’s head of […]

Wells Fargo has cemented its position as the US’s largest commercial real estate lender. In a presentation to analysts last month, the US bank said its  commercial property finance revenues had risen 17.9% in the three years since 2011, to $2.5bn at December 2013. Mortgage Bank Association origination data shows Wells’ total CRE deal volumes […]

Selling down debt and assets will cut Blackstone fund’s IERET exposure to €35m

Legal & General is providing a £51m, 10-year, fixed-rate debt facility to the LNT Group, whose businesses include Ideal Carehomes. L&G’s loan – the insurer’s first to the care home sector – refinances some of LNT’s bank debt, releasing capital to help fund Ideal Carehome’s plans to build six to eight new homes a year. […]

London-based servicer buys €213m portfolio as Publity auction “tests market” German asset manager Publity has sold a portfolio of German non-performing real estate loans with a face value of €213m to Link Financial. Publity ran the secondary trade through loan auction platform DebtX. It received 23 indicative bids for both specific assets and the entire […]

Hong Kong-listed Chinese developer Logan Property has launched a high-yield bond in a bid to raise $300m. A raft of banks including Citigroup, Deutsche Bank, HSBC, Goldman Sachs, JPMorgan and VTB Capital are joint book runners and arrangers on the placement. The 11.25%-coupon, five-year notes will be listed on the Hong Kong stock exchange. Bloomberg […]

Canada Life sees “further demand for long-term, fixed- rate debt, as interest rates remain low”, according to London-based business development director Colin Humphries. The London office recently provided a £200m, 20 year- loan for a private investor’s prime central London property portfolio – its largest real estate financing to date – at a leverage level […]

Capital has been flowing into open-ended UK balanced funds twice as quickly as last year, as investors gain confidence in property’s growth potential. Legal & General’s £1.3bn UK Property Unit Trust is taking in £40m-£50m of new capital per month, said L&G’s director of fund management, Michael Barrie. “Capital committed in the first half of […]

Italian, French and US banks team up for €430m refinancing in the low 200bp

Evidence of the recovery of property debt markets is becoming increasingly plentiful. In the US, competition to lend to good-quality sponsors and assets is fierce and the number of conduit lenders to CMBS has shot up; recent estimates count at least 35. It’s the same story in Europe, where markets that were moribund early last […]