Firm expands global initiative in commercial real estate finance
MADISON, N.J., October 16, 2012 - Prudential Real Estate Investors announced today that it has secured $805 million of discretionary capital for its Prudential U.S. Real Estate Debt Fund, bringing to more than $1.6 billion the amount PREI has raised so far from investors for its global debt strategy. PREI® is the real estate investment and advisory business of Prudential Financial, Inc. (NYSE: PRU).
The investors in the fund consist of leading investment institutions including pension funds, sovereign wealth funds and other prominent global investors from the United States, Asia and the Middle East. These investors also have extensive co-investment capital to invest alongside the fund. The recent fund closing follows the $800 million raised in 2011 for its U.K. offering, Pramerica Real Estate Capital 1 Fund.
“In the U.S., we expect significant demand for creative debt financing as approximately $1.8 trillion in mortgage loans come due over the next several years, leading property owners to search for reliable and trusted sources of capital,” said Jack Taylor, managing director, head of PREI’s global real estate finance group and portfolio manager for the U.S. platform. “We look forward to continuing to build long-term relationships by providing capital to borrowers, co-lenders and other market participants, while meeting the strong and growing global appetite from institutions for access to sound debt investments with attractive risk-adjusted returns.”
The senior management team of the U.S. debt platform, managed from the firm’s New York office, includes Steve Alpart and Steve Plust, both managing directors and long-time colleagues of Taylor.
“We will target debt investments secured by institutional quality income producing properties throughout the U.S., owned by experienced real estate investors,” Plust said. “The fund will provide fresh capital for new originations as well as make secondary market purchases of performing, sub-performing and non-performing loans.”
PREI will offer mezzanine finance, debt-like preferred equity and first mortgages in areas not being filled by banks and other senior commercial mortgage lenders.
Added Alpart, “Typically our investments will range in size from $10 million to $65 million but can be significantly larger. Having had experience in these markets for many years in many cycles, we can offer timely, flexible and creative financing solutions for borrowers as they refinance, recapitalize and acquire properties. Because we are not a ‘loan-to-own’ shop, we work particularly well with borrowers and senior lenders in constructing capital solutions.”
PREI is a leader in the global real estate investment management business, offering a broad range of investment vehicles that invest in private and public market opportunities in the United States, Europe, the Middle East, Asia, Australia and Latin America. Headquartered in Madison, N.J., PREI has other offices in Atlanta, Chicago, Miami, New York, San Francisco, London, Lisbon, Luxembourg, Madrid, Munich, Paris, Istanbul, Abu Dhabi, Mexico City, Rio de Janeiro, Sao Paulo, Beijing, Hong Kong, Seoul, Singapore, and Tokyo. In addition, PREI has representatives in Milan and is establishing a presence in Sydney (pending regulatory approval). As of June 30, 2012 PREI managed approximately $50.1 billion in gross real estate assets ($33.8 billion net) on behalf of more than 490 clients worldwide. For more information, visit http://www.prei.com.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $961 billion of assets under management as of June 30, 2012, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/