UNITED STATES - Divco West Properties and LoanCore Capital have come together to form a $2.5bn (€1.8bn) investment fund which will target real estate debt opportunities at major institutional investors such as Singapore's GIC.
The Government of Singapore Investment Corporation (GIC) is understood to be one of its biggest largest investors as it has committed to invest $1bn now followed by a further $500m in January.
The investment proposition hopes to tap the lack of liquidity in the US as few sources are open at present when buying debt or providing financing for the acquisition or development of new or existing properties.
Most people in the industry predict the situation is unlikely to change until 2009 so many investors are sitting it out until they see investments opportunities where they can re-enter the market.
Only recently, Morgan Stanley reported the issuance of commercial mortgage-backed securities (CMBS) has dropped by 90% so far this year from a record $230bn in 2007.
This could give investors such as the LoanCore venture access to some strong investment opportunities and capital raising through institutional investors such as pension funds.
Most of the deals for the fund will be to buy existing debt on US real estate properties - focused largely on the main property types of office buildings, industrial properties, shopping centres and apartments - though financing on new real estate assets may be considered.