Och-Ziff Real Estate, the real estate arm of New York-based alternative asset manager Och-Ziff Capital Management, has purchased a $300 million senior loan portfolio from GE Capital’s franchise finance business, PERE has learned.
The portfolio encompasses some 500 performing mortgages backed by more than 475 retail properties, primarily gas station convenience stores in 38 states.
Terms of the deal were not disclosed, and it is unclear through which fund Och-Ziff acquired the mortgages. Och-Ziff declined to comment and GE Capital did not respond to a request for comment by press time.
Och-Ziff Real Estate invests in both real estate private equity and credit in the US and Europe. Most recently, the firm officially launched Och-Ziff Real Estate Credit Fund in December with an $800 million target, according to a filing with the US Securities and Exchange Commission and PERE research.
As of June 30, Och-Ziff had total commitments of $323 million for the fund and had invested $22.4 million of the vehicle’s capital, according to its second-quarter earnings results.
The fund will focus on real estate credit investments in North America, primarily in the US, across multiple types of real estate and various securities, according to documents from the New Jersey Division of Investment, which committed $100 million to the fund in May 2015.
Investments will cover traditional real estate assets such as multifamily, office and retail; non-traditional niche assets such as gaming, housing, senior housing and golf courses; transitional assets; ground leases; and corporate real estate and real estate management companies. The transactions can be structured as first-lien loans, mezzanine loans, subordinate notes, B notes, loan portfolios, preferred equity, ground leases, sale leasebacks and other credit instruments.
Through the fund, Och-Ziff will target net returns in the low double digits, with a significant current income component, according to the NJDOI documents.
Och-Ziff also held a final close on $1.5 billion on Och-Ziff Real Estate Fund III in 2014, exceeding its initial $1 billion target. Similar to the credit fund, the opportunistic vehicle is expected to be split between traditional real estate assets such as multifamily, office, hotel and retail, and non-traditional real estate assets, including gaming, distressed land and residential, cell towers, parking, golf, debt and senior housing. The firm had invested $330 million of the fund’s capital as of June 30.
Founded more than 13 years ago, Och-Ziff has raised more than $3 billion for dedicated real estate investments and acquired more than $7 billion in assets. The firm had total assets under management of $42 billion as of June 30.
With more than 30 years of experience, GE Capital’s franchise finance business is a lender for the US franchise finance market, specializing in financing mid-market, multi-unit operators in the restaurant and hospitality industries. The platform currently manages $6 billion in assets, according to its website.