LONDON, Aug. 3, 2012 /PRNewswire/ -- Cornerstone Real Estate Advisers ("Cornerstone" or the "Company"), one of the world's 10 largest real estate investment advisers[i], has completed an £83 million refinancing for Derwent London plc ("Derwent London"), secured against two prime central London assets valued at £172 million. The facility was arranged by Laxfield Capital, which also will act as manager of the loan.
The deal represents Cornerstone's first real estate lending transaction in the United Kingdom and is in line with the Company's strategy of extending into Europe its U.S. commercial real estate debt platform, which completed $5.7 billion in real estate transactions in 2011.
Cornerstone is providing Derwent London with a new fixed rate, 12-year £83 million loan. This new financing package is secured against two high quality assets in the Fitzrovia sub-market of London's West End: a 147,000-square-foot, six-story landmark office building at 2-8 Fitzroy Street, W1, which is fully leased to leading international engineering and design group Arup; and a multi-tenanted block fronting Tottenham Court Road, Warren Street and Grafton Way, which incorporates the 330-room Grafton Hotel, which is let to Edwardian International Hotels Ltd., operating under its Radisson Blu brand, together with a parade of 11 ground floor retail and restaurant units, let to tenants including Boots, Tesco, William Hill and Ask Restaurants. The average weighted unexpired lease term is approximately 23 years.
Laxfield Capital originated, helped structure, and negotiated the deal on behalf of Cornerstone, following its appointment last month to source and manage loans for Cornerstone in the UK.
The deal is typical of the type of opportunity Cornerstone is targeting in the U.K., where it is seeking to provide property-secured senior loans, with a single property target lot size of between £25 million and £75 million. Cornerstone offers loan maturities ranging from seven years to as many as 20 years, which it believes are longer than those currently offered by most traditional bank lenders.
The launch of the Company's UK lending business builds on Cornerstone's existing U.S. commercial real estate debt platform, which originated more than $4 billion in commercial mortgages during 2011, secured by approximately $6.5 billion of real estate assets.
"This is an important milestone in Cornerstone's introduction of its debt capabilities to the United Kingdom, and proves that we can provide highly reliable debt capital that meets the needs of the market," said Robert F. Little, chief investment officer -- finance, for Cornerstone. "We are looking forward to continuing to grow our European presence and to geographically diversifying our lending portfolio over time."
"The completion of our first real estate debt transaction so soon after entering the U.K. market and with such a high calibre partner as Derwent London is a significant achievement and clearly demonstrates our intention to put Cornerstone at the forefront of the senior lending market in Europe," added Charles Weeks, CEO of Cornerstone Europe. "This will complement the already established position in this field in the U.S., where we have a debt program with more than $20 billion of assets under management, in multiple facets of real estate finance."
Damian Wisniewski, Finance Director at Derwent London, commented: "We are delighted to welcome Cornerstone as a lender to Derwent London. This new long-term, fixed rate loan provides us with a diversified source of funding at a modest all-in interest rate, taking advantage of the recent falls in gilt rates. It also enhances our debt maturity profile and adds an important name to our established pool of lenders."
Adam Slater of Laxfield Capital added: "This is just the sort of launch we hoped for Cornerstone's UK lending program. Derwent is a first rate sponsor, and Cornerstone won their confidence that it could deliver, working smoothly to execute in the agreed timescale. We now look forward to finding more good business to fulfil this fixed rate mandate and expand our relationship with Cornerstone."
The transaction with Derwent London is the latest in a number of recent accomplishments for Cornerstone. The firm:
- had a final close of the Cornerstone Enhanced Mortgage Fund LP (CEMF) in February. The fund, with $315 million raised from domestic and international institutional investors, invests in first mortgage debt secured by real estate that has undergone an ownership change or another transition as a result of recent financial conditions;
- raised a further $400m in late 2011 from a separate account client with a similar investment strategy as CEMF; and
- held a final closing earlier this year for Cornerstone Real Estate Fund VIII with $546 million of new capital (against a $400 million target).
For more information about Cornerstone, visit www.cornerstoneadvisers.com
[i] Pensions and Investments, Largest Real Estate Investment Managers Rankings, 3 October 2011
About Cornerstone Real Estate Advisers LLC
Cornerstone Real Estate Advisers LLC, with affiliate and subsidiary offices in the U.S., UK, Europe and Asia, is one of the world's top ten largest real estate investment advisers. It provides core and value-added investment and advisory services, including a comprehensive suite of private and public real estate debt, equity and securities expertise and services, to institutional and other qualified investors around the globe. Cornerstone is a member of the MassMutual Financial Group.
Cornerstone currently serves more than 170 clients globally. As of April 30, 2012, Cornerstone and its subsidiary Cornerstone Europe had $34.7 billion of real estate assets under management.
Cornerstone's debt under management currently totals approximately $23 billion and comprises three distinct businesses: core lending (which currently stands at approximately $14 billion), capital markets (including CMBS, REITs, residential business, with $7 billion), and alternatives (including high yield lending, mezzanine, bridge, tax credit and credit facilities with $2 billion). In 2011, Cornerstone completed $5.7 billion of debt transactions and has already completed $3 billion of debt transactions in 2012.
Cornerstone's equity business focuses on a range of asset classes including apartment, office, retail, industrial and hotel properties across the U.S., U.K. and Europe.
More information is at www.cornerstoneadvisers.com.
About Laxfield Capital
Laxfield Capital is a debt origination, execution and loan management business which works with lenders seeking wider access to the UK property lending market. Founded in April 2008 by Adam Slater and Emma Huepfl, who have worked together in the property lending market since 1992, Laxfield Capital Ltd and Laxfield Asset Management Ltd has three formal origination and management mandates from Metropolitan Life Insurance Company (MetLife), Muenchener Hypothekenbank (MunchenerHyp) and Cornerstone Real Estate Advisers. It is contracted to manage loans on behalf of six lenders totalling £1bn.
Laxfield has contacts with a large network of borrowers across the property industry and the inter-bank market. Its lending activities are focused on UK commercial property, and in sizes ranging from £15m to £250m+. More information is available at www.laxfieldcapital.com.
For further information in the U.S., please contact:
SOURCE Cornerstone Real Estate Advisers