Singapore sovereign wealth fund Temasek and CenterSquare Investment Management have partnered to create a US$200m (€194m) investment fund focused on providing subordinate loans for commercial real estate projects.
Initial investments for the vehicle will be made alongside CenterSquare’s latest debt fund, primarily in pre-selected deals. The vehicle will follow the same investment strategy as CenterSquare’s other debt funds, prioritising multifamily properties while remaining adaptable to market fluctuations.
Michael Boxer, managing director of CenterSquare’s private real estate debt vertical, said: “In the current higher-rate environment, we continue to see many borrowers in need of ‘gap capital’ as loans come due and they are no longer able to secure the same level of mortgage loan proceeds that were available previously in the lower-rate climate.
“We believe this creates an excellent opportunity for disciplined investors to earn attractive all-in returns, and we’re excited to expand our relationship with the highly respected Temasek investment team.”
Richard Gorsky, private real estate debt managing director at CenterSquare, said: “In my opinion, now is one of the best times I’ve 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.
“We are excited to continue our partnership with Temasek, which began in early 2022, and has grown steadily since that time. It is a pleasure working with like-minded, pragmatic capital partners, who have allowed us to continue providing creative solutions for our borrowers.”
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