Commercial Real Estate Direct Staff Report
Massachusetts Mutual Life Insurance Co. is making its first CMBS B-piece investment. It's circled the most subordinate classes of JPMDB Commercial Mortgage Securities Trust, 2017-C5, which is expected to price later this week or early next.
The transaction is backed by $1 billion of loans contributed by Deutsche Bank and JPMorgan Chase Bank. MassMutual's Barings Real Estate Advisers, formerly known as Cornerstone Real Estate Advisers, is buying subordinate bonds that would equal 5 percent of the deal's market value, qualifying those as its horizontal risk-retention piece. As such, Barings won't be able to hedge, finance or sell the securities for at least five years.
MassMutual was seen moving into the B-piece business last summer, when it hired Doug Cooper as managing director to build out a B-piece investing platform. Cooper previously had developed American Capital Ltd.'s B-piece business. And before that was with Allied Capital Corp. and Criimi Mae Inc., two other dominant B-piece players from the legacy CMBS era.
For its initial investment, MassMutual is shooting for a 13.9 percent yield....
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