Brookland Partners has established a new mezzanine and whole loan debt unit, European Real Estate Capital (E-REC), as it bids to tap into demand from value-add strategy borrowers, writes, PERE’s sister publication Private Debt Investor.
The firm said it established the unit in response to a demand from higher loan-to-value financing for value-add and ‘transitional assets’.
The lender has executed its first deal for the platform with seed capital from a private fund related to Omni Partners, which owns a 40 percent stake in Brookland.
E-REC-backed LRC UK’s £31 million ($48 million; €42 million) purchase of City Square in Liverpool.
The building is around 78 percent occupied by government-related agencies including the Home Office – the Liverpool Civil and Family Court is housed in the building while quango MyCSP, which administers the Principal Civil Service Pension Scheme also has its offices in the building.
LRC UK is an existing client of Brookland though the financing was its first loan to the real estate investor, explained Nassar Hussain, managing partner of Brookland Partners.
E-REC is expected to make loans of up to 80 percent LTV and is seeking net IRRs of 9 percent to 10 percent.
Omni Partners are providing the new venture with seed capital from a private fund. E-REC plans to build up a track-record of deals before approaching third party investors to raise its own fund sometime in the first half of next year, Hussain explained.
The lender has a pipeline of mezzanine and whole loans across three European jurisdictions worth more than €150 million, added Hussain.
“With the launch of E-REC, Brookland has expanded its platform to offer fully integrated commercial real estate debt solutions. E-REC leverages Brookland’s significant experience and expertise in origination, underwriting, structuring and management of real estate debt, while upholding Brookland’s strong reputation for delivery and execution,” said Hussain.
Independent real estate investment banking firm Brookland Partners sources and structures investment opportunities, advises on capital raising as well as working on restructuring. It is now working on a real estate debt fund platform in partnership with Omni.