Singapore state investment firm Temasek Holdings and CenterSquare Investment Management from the US have teamed up to establish a US$200 million real estate debt co-investment fund.
The fund will invest in high quality subordinate real estate loans, with the aim of generating risk-adjusted, equity-like returns through mezzanine loans and debt-like preferred equity investments, secured predominantly by “highly-viable, cash-flowing” rental assets, the US investment manager says in a statement on February 4.
The company says the first tranche of capital will invest largely in pre-identified deals alongside its most recent debt fund, RCG Longview High Yield Debt Fund VI.
According to Richard Gorsky, managing director of CenterSquare’s private real estate debt team, “now is one of the best times I have seen in my career to invest in commercial real estate debt”.
“The convergence of several factors, including the reconstitution of the borrower’s capital stack and resetting valuations, combined with the favourable fundamentals across residential subsectors underpin this timely co-investment opportunity,” he says.