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Real Estate Debt – Global Real Estate Lending
The Senior Secured Lending Strategy (the ‘Strategy’) provides direct lending exposure to US and European real estate debt markets with the aim of maintaining an appropriate margin of safety with a potential yield pick up to investment grade credit.
- Conservative risk positioning with a focus on lower risk, senior secured loans only
- Large market with ample potential opportunities: USD 2.9tn in the US and EUR 1.1tn in Europe1
- We believe an attractive relative value to both comparable real estate backed public bonds and general investment grade credit markets
- Established track record since 2010, with over USD 4.3 billion of loans made, backed by USD 6.4 billion of real estate
1. ‘European Commercial Real Estate Finance 2016 Update’ by CBRE and Morgan Stanley Research (October 2016).
Approach
At the current point in the credit and real estate cycles, we seek to provide our clients with a conservative direct lending risk profile with a meaningful margin of safety. Our focus in the current market environment is on floating rate, medium term loans for our pension fund clients and long-dated fixed rate loans for insurance companies.
We invest in senior, secured commercial and residential real estate loans in the US and Europe and target a yield pick up to traditional, investment grade credit markets and modest LTV ratios. The strategy is designed to be more defensive than others on offer in the market. We typically provide senior loans or whole loans to experienced real estate sponsors who seek to improve the value of the property via refurbishment capex or leasing activity. Our investment team has direct deal origination capabilities across the markets where we operate.
We have invested a total volume of over USD 4.3 billion in real estate debt across residential, office, industrial and retail sectors, with a focus on financing core plus and value-add projects in the US, UK and continental Europe.
The US regional sub-strategy is managed from GPM’s New York, NY and Charlotte, NC offices, and the European regional sub-strategy is managed from GPM’s London office. We have significant on-the-ground expertise and deep industry networks.