Cornerstone Real Estate Advisers, one of the world's largest real estate investment advisers and a new entrant into the European commercial real estate lending market, has chosen Laxfield Capital, a debt origination, execution and loan management business, to originate and manage loans on Cornerstone's behalf in the UK, the companies announced today.
The appointment is in line with Cornerstone's strategy of extending into Europe its U.S. commercial real estate debt platform, which originated more than US $4 billion (approx. 3.17 billion) in commercial mortgages during 2011.
Laxfield will assist Cornerstone in sourcing, structuring and managing property-secured senior loans, with an initial target lot size between £25 million (approx. 31 million) and £75 million (approx. 93 million). Cornerstone will offer a fixed rate product with maturities ranging from seven years to as many as 20 years.
"We believe our fixed rate program which offers longer terms than are typical in the United Kingdom will be received well," said Charles Weeks, CEO of Cornerstone Europe. "We have a seasoned Cornerstone team on the ground in the UK, that knows the local markets and key participants well; an advantage that will be enhanced by our relationship with Laxfield, as well as by leveraging the extensive real estate lending expertise we already have in the US"
Cornerstone, which has assets under management totaling US $34.7 billion (approx. 27.5 billion), invests on behalf of more than 145 clients around the world.
"This is a very attractive institutional market and a significant opportunity for Cornerstone to geographically diversify its lending portfolio," said Robert Little, chief investment officer finance, for Cornerstone. "We're looking forward to expanding rapidly both in terms of products and markets."
Adam Slater of Laxfield commented: "Securing this new mandate from Cornerstone is a significant step forward for Laxfield, and assists an established and highly reliable global real estate organization with bringing additional debt capital to the European market. We think it will be especially interesting to offer 7 12 year funding, which we see as restricted in the market at present.
"Cornerstone's target investment size fits neatly between the business areas of our existing funders and will significantly enhance the range of deals that we can cover.
"We are delighted to be working with Cornerstone on this new program, particularly as they are well-established and trusted partners and there is a longstanding link between our organizations. Our platform will allow Cornerstone immediate access to deal flow and the benefit of our twenty year presence in the market to find deals to suit its business plan and drive investment returns for its clients."
Source: FTI Consulting
