The fund, MONY/Transwestern Mezzanine Realty Partners LP, will be co-managed by MONY Realty Partners Inc. through the newly created MONY Realty Capital Inc., and Transwestern affiliate Aslan Mezzanine Realty Partners GP LLC. It will make mezzanine investments of $3 million to $15 million.
"We felt there were significant opportunities within the marketplace for a mezzanine product," MONY Realty Capital president and CEO Thomas M. McCahill tells GlobeSt.com. "We also think it's a lender-oriented product. It's primarily a debt instrument with numerous mortgage-type covenants and we felt it was a good complement to our existing loan products."
According to McCahill, the fund had significant investments in place before the ink on the paperwork was even dry. "When we closed the fund, there were approximately $60 million in funded deals," he says. While he would not identify the assets involved, McCahill says there are roughly seven transactions already funded. In addition, he says, "There are numerous deals in the pipeline on a broad array of product, mostly in apartment deals." Some office-property deals are also in the works, he says.
Mezzanine funding, McCahill says, will be a lending staple in the real estate industry going forward. "Securitization, industry consolidation and more conservative underwriting have combined to reduce proceeds at the senior loan level and create a permanent need for mezzanine real estate capital," he says. "On the supply side, the institutionalization of mezzanine capital has made it a widely accepted form of financing."
MONY Realty Capital Inc., formerly MONY Real Estate Investment management, is a wholly owned subsidiary of the MONY Group. McCahill has been tapped to serve as president of the new entity. "Our core businesses--long-term mortgages, construction lending and mezzanine financing--will remain our primary areas of focus," McCahill says. "However, our presence in the real estate investment banking and advisory arena will expand."
MONY Realty Capital's management team has been restructured to include an executive committee that consists of McCahill, CFO/corporate secretary Rusty Rosanova, and managing directors Bill Swackhamer, Richard Katzenstein, and Jim Mazzarelli.
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