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Monday, 15 April 2019

True North Management Eyes $650Mln for Latest Investment Fund

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Commercial Real Estate Direct Staff Report

True North Management Group has raised $145 million of a planned $650 million for its latest investment vehicle.

The White Plains, N.Y., investment manager pursues transitional assets, or those that might be overleveraged, or whose owners are undercapitalized, thus unable to fund needed renovations or upgrades.

The latest fund, True North Real Estate Fund IV LP, would be a follow-up to Fund III, which had raised $548 million of commitments in 2015. That capital-raising effort, which included institutional, high net-worth and family office investors, was assisted by Atlantic-Pacific Capital of New York.

True North was founded in 2005 by Richard Gunthel and Paul Turovsky, who previously ran Deutsche Bank's real estate investment management operation, having joined that bank in 1998 when it had acquired Bankers Trust. Gunthel was head of DB Real Estate, while Turovsky was fund manager for the unit's mezzanine investment funds.

While at BT, the two were among the pioneers in buying distressed mortgages on U.S. properties, including from the Resolution Trust Corp., which oversaw the savings and loan bailout. They broadened their investment scope to include Europe and Asia and, while with Deutsche, helped orchestrate that company's acquisition of Rreef Funds in 2002.

They initially set high-yield real estate debt as True North's strategy and in 2006 raised a $110 million fund that pursued mezzanine loan investments. That first fund had produced what the New Jersey Investment Council called "top-quartile returns during a challenging time for real estate investment."

That was followed up in 2010 by True North High-Yield Investment Fund II, which had raised $535 million that targeted primarily nonperforming and subperforming debt.

The predecessor funds all maintained relatively low leverage levels. The New Jersey pension system, which committed to invest $100 million in Fund III, had noted that Fund II's leverage level was only 32 percent.

True North in recent months has been more active selling properties than it has been buying. Most recently, for instance, it generated $48 million from the sale of the 95,350-square-foot Tribune Tower office building in Oakland, Calif. It had purchased the property, which it had redeveloped into creative office space, two years ago in a partnership with Harvest Properties, for $20.4 million.

Its most significant recent purchase took place more than a year ago, when it paid $41 million for the Sawgrass Corporate Park I, a 230,688-sf office property in Sunrise, Fla.

Comments? E-mail Orest Mandzy, or call him at (267) 327-4281.



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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 - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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