Principal Real Estate Investors and Macquarie Group have formed a joint venture to invest in commercial mortgage-back securities (CMBS).

The two firms said they would jointly manage the Principal Commercial Capital venture, targeting opportunities in the US.

Principal will source, underwrite, close and service loans, while Macquarie will be responsible for funding and capital markets expertise.

The two firms said the joint venture would focus on the office, industrial, retail and residential sectors. Lending opportunities in the hospitality and self-storage sectors will also be considered, Principal managing director, Margie Custis said.

Deal size, Custis said, will vary, with opportunities up to $100m (€77.6m) considered but with average deal size likely to be between $15m and $25m. Loans will have a 10-year term.

Custis said there was a lack of capital in the market considering the amount of loans with 2004 and 2005 vintages due over the next three years, with $300bn maturing by 2017 and $80bn next year.

Principal has provided 2,000 loans totalling more than $16bn in 50 securitisations.

Macquarie, meanwhile, sees significant opportunity in CMBS. Timothy Gallagher, Macquarie managing director and head of commercial real estate markets, said the venture could invest “several billion dollars a year for several years”.