"We believe that the most attractive opportunities will be in originating new commercial mortgage loans," Brookfield says in its August 28 filing. The newly-formed REIT also anticipates "attractive investment opportunities" in B notes and mezzanine loans and expects to acquire large-loan or single-borrower CMBS.
For its part, Marathon plans to invest primarily in mortgage-backed securities and mortgage loans, initially in the residential sector before branching out into CMBS. In its SEC filing, Marathon notes that the RMBS market represents more than $7 trillion in assets, of which $2 trillion is non-agency RMBS. Both REITs will commence operations after fundraising is completed.
The Brookfield REIT will be externally managed by Brookfield Realty Capital Advisors, a subsidiary of Brookfield Asset Management. Its chairman is Barry Blattman, a senior managing partner at BAM. Managing the Marathon REIT will be Marathon Asset Management, which the Treasury Department selected in July as one of nine pre-qualified fund managers under PPIP.
Brookfield Realty Capital will be headquartered at BAM's Three World Financial Center here, while Marathon's offices are at One Bryant Park. The two vehicles join a growing number of REITs created to take advantage of distressed opportunities. Year-to-date, the largest IPO in this sector was the $951.5 million raised by Starwood Property Trust, which filed in June.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
