The Mezzanine Finance Group was part of Lend Lease Real Estate Investments, a division of the Australia-based Lend Lease Corp., a real estate company. The group originates and underwrites mezzanine loans on commercial real estate through its Dallas and New York offices. It also manages the LLFC Enhanced Yield Debt Fund, as well as a separate account for mezzanine loans, which specializes in higher yield financing of new construction, including condominium developments.

The LLFC Enhanced Yield Debt Fund was originally sponsored by Fleet Bank, Lend Lease Real Estate Investments, and CDP Capital-Real Estate Advisory. CWCapital, along with an affiliated company, has taken over Lend Lease's co-general partner and management positions in the fund. CWCapital is also handling the fund's loan servicing. The fund can invest up to $240 million in mezzanine loans nationwide and is targeting transaction level returns between 12% and 17%. Fleet Bank will continue in its co-general partner and co-manager role.

According to Todd Schuster, CWCapital's CEO, this acquisition is the next step in expanding CWCapital's business. "When we partnered with CDP Capital-Real Estate Advisory a little more than a year ago, our goal was to quickly and strategically enter the high-yield real estate debt arena in a three-step approach. Our first step was to become actively involved in B Piece buying in CMBS pools. In the fourth quarter of 2003, we successfully launched this effort, having been instrumental to two B Piece investments, representing over $3 billion of loans. The acquisition of the mezzanine group has enabled us to reach the second step: adding mezzanine financing to our lending platform. And we're well on our way to completing our third step: becoming an active player in the B Notes market, which we expect to commence in the first quarter of this year," says Schuster.