LONDON-The local office of Pramerica Real Estate Investors, a subsidiary of US-based Prudential Financial, has arranged $185 million of institutional capital for European real estate debt. The amount raised includes capital from a pension fund serviced by the Netherlands-based APG.
The fund will invest the discretionary capital, and any additional capital committed to the strategy, in directly originated real estate mezzanine finance and debt-like preferred equity opportunities. The firm’s European arm has a strategy that is part of a global initiative to provide institutional investors with opportunities for real estate debt, a gap in the market to assist mid-size, high-quality private and public property companies and funds, according to Jack Taylor, managing director at Pramerica.
“The dramatic shortage of debt capital in the commercial real estate markets has created significant borrower demand in the short term, which we expect will increase and endure as the markets evolve in the face of looming capital shortfalls,” Taylor said in a statement.
He said the fund will target borrowers looking to finance property acquisitions of between $13 million and $369 million. The platform will also work with banks and other institutions on refinancing existing borrowings, as well as the restructuring of performing loans where a further injection of capital is required. However, the platform will not invest in distressed or securitized debt, and will focus primarily in the UK and Germany.
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