Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Tuesday, 10 October 2017

Buyer of Monogram Residential to Continue Pursuing Core-Plus Investments

The investment vehicle that Greystar Real Estate Partners formed to acquire Monogram Residential Trust Inc. three months ago will continue pursuing other investments in what the company calls core-plus properties across the country. The perpetual-life fund, Greystar Growth and Income Fund LP, could raise additional capital and will maintain a roughly 50 percent leverage level.

Commercial Real Estate Direct Staff Report

The investment vehicle that Greystar Real Estate Partners formed to acquire Monogram Residential Trust Inc. three months ago will continue pursuing other investments in what the company calls core-plus properties across the country.

The venture, which includes GIC, Singapore's sovereign wealth fund, APG Asset Management of the Netherlands and Ivanhoe Cambridge of Canada, acquired the company in a deal valued at $4.4 billion.

Greystar, of Charleston, S.C., the country's top apartment manager, with a portfolio of more than 415,000 units, had been in talks with Monogram, the former Behringer Harvard Multifamily REIT I Inc., a non-traded REIT that listed its shares three years ago. Those shares long had traded at a discount to the company's net asset value, prompting opportunistic investors, including Madison International Realty ,to invest in it.

At the same time, Greystar was gearing up a perpetual-life fund, Greystar Growth and Income Fund LP, that would invest in core-plus properties. That is, those that are stabilized and performing well, but whose incomes could be goosed through management. It already had APG as a lead investor for the fund and soon added Ivanhoe Cambridge. The two are the venture's lead investors. GIC subsequently came aboard. And PGGM Private Real Estate Fund, which had started investing with Monogram in 2007, stayed on, with its interest having been restructured.

What initially was thought to be a blind pool, meaning a fund with no initial investments, instantly got a substantial portfolio. The fund, however, isn't done investing. It will continue to pursue properties similar to those owned by Monogram - relatively newer complexes that are stabilized and in major markets throughout the country. The fund could very well raise additional capital, even from other investors.

The draw for Greystar and its partners: Monogram lacked economies of scale in many of its markets. So while the 48 properties, with 13,438 units, in its portfolio all were relatively new - most were constructed since 2010 - it lacked scale.

Bob Faith, Greystar's founder and chief executive, noted that Monogram also...





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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2016
Investment Bank #Deals Vol$mln MktShr%
JPMorgan Securities 14.94 10,350.16 15.14
Deutsche Bank 14.21 9,926.60 14.52
Wells Fargo Securities 13.36 9,513.96 13.92
Citigroup 10.87 8,061.79 11.80
Goldman Sachs 10.05 7,563.72 11.07

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2016
Lender #Loans Vol$mln MktShr%
JPMorgan Chase Bank 133.67 8,670.33 13.34
Goldman Sachs 156.20 7,418.37 11.41
Deutsche Bank 178.17 6,510.75 10.02
Citigroup 184.41 5,512.20 8.48
Morgan Stanley 113.18 4,130.53 6.35

 

 

 

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