Cornerstone finds debt partner for Europe

Cornerstone Real Estate Advisers is teaming up with a London-based company started by former GE Capital professionals to bring a debt origination product to Europe.

Cornerstone Real Estate Advisers has signaled its intention to join the growing throng of real estate investment firms expecting to capitalise on a lack of senior debt in Europe.

The Hartford, Connecticut firm said it was a “new entrant” to the Europe lending scene as it revealed the selection of Laxfield Capital, a London-based firm started by former GE Capital professionals, Adam Slater and Emma Huepfl, that is expected to help originate and manage loans on Cornerstone’s behalf in the UK.

In a statement on its plans, the firm explained the appointment was in line with its strategy to extend its US commercial real estate debt platform, which originated more than $4 billion in commercial mortgages last year.

Laxfield will assist Cornerstone in sourcing, structuring and managing property-secured senior loans with an initial target lot size between £25 million (€31 million; $40 million) and £75 million. Cornerstone said it would offer to borrowers a fixed rate product with maturities ranging from seven years to as many as 20 years.

“We believe our fixed rate programme, which offers longer terms than are typical in the UK, will be received well,” said Charles Weeks, chief executive of Cornerstone Europe.

The revelation comes a few weeks after Robert Little, chief investment officer at Cornerstone Real Estate Advisers, told PERE in a feature on debt funds that he was seeing “steady demand” from investors for both funds and separate accounts.

In addition to managing a separate account for the Los Angeles County Employees Retirement Association (LACERA), the firm also announced a final close in April on $315 million for its Cornerstone Enhanced Mortgage Fund. Both the fund and the separate account are investing in first mortgage debt with about half of the capital from the two vehicles now invested or committed.

Cornerstone itself is an indirect subsidiary of Massachusetts Life Insurance Company and was founded in 1994.