Under the three-year agreement, MetLife will source and conduct due diligence on potential commercial real estate mortgage originations, while SunTrust will provide financing for up to $5 billion of those loans.
“Our goal is to be one of the top five institutional real estate investment managers, and with this mandate from SunTrust, we are confident the company is headed in the right direction,” said Robert Merck, global head of MetLife Real Estate Investors, in a statement.
In an email to PERE, Brian Fox, MetLife’s chief marketing officer, called the venture “one of the largest, and most noteworthy mandates we have done in the past year, given its size and scope. We have an active and robust pipeline of transactions.”
Last October, MetLife announced its intention to build a third-party asset management business to invest in real estate equity, commercial mortgages and private debt on behalf of institutional clients. To execute its plan, the firm reorganized its existing real estate team to create a new equity strategies group, as well as a new debt strategies group to help provide financing for real estate projects from institutional investors that include other insurance companies, pension plans and sovereign wealth funds.
Prior to forming MetLife Real Estate Investors, the New York-based insurer had been investing in the asset class for a century, and was best known as one of the largest global portfolio lenders in the commercial real estate industry, with $43.1 billion in outstanding commercial mortgages at the end of 2012 and more than $9.6 billion in commercial mortgage originations as of December. The new platform also held a $12 billion in real estate equity portfolio at year-end 2012, including investments in office, apartment, retail, industrial and hotel properties worldwide.