LandCap closes on residential loan deal

The joint venture between Goldman Sachs’ Whitehall funds and NorthStar Realty has closed on a loan portfolio from Wachovia Bank backed by almost 3,000 land lots. CEO Jeffrey Gault says real estate is a 'challenged marketplace.'

LandCap Partners has closed its second deal since being formed by Goldman Sachs’ Whitehall Real Estate funds and NorthStar Realty Finance last year.

The real estate land company, which was formed last October with $350 million (€237 million) in equity, has acquired real estate loans backed by 2,900 finished and “paper” lots from Wachovia Bank.

Chief executive Jeffrey Gault said in a statement the deal marked LandCap’s intention of acquiring land, as well as land debt, on a national scale in what he described was a “challenged marketplace.” The deal, he went on to say, would allow LandCap to purchase further loans from Wachovia, the US’ fourth largest bank, which has been troubled by the sub-prime crisis.

Los Angeles-based LandCap was formed by Whitehall and NorthStar, the real estate investment arm of the company founded by former Whitehall co-founder David Hamamoto in 1997, to target residential land in the US. Last month, the firm closed its first deal acquiring 252 single-family lots in Colorado from private equity firm Quadrant Investment Group.

At the time, Gault said the firm planned to resell the Colorado land back to homebuilders when the real estate market improved. “This acquisition will afford home builders the opportunity to purchase this valuable land when the timing is right for them and for their customers,” he said.