Cornerstone enters European property lending

Cornerstone Real Estate Advisers has entered the European real estate lending market by providing a £83 mln (EUR 105 mln) refinancing secured against two prime central London assets. The facility was provided to central London REIT Derwent London.

Cornerstone is headquartered in Hartford, Connecticut and has $33 bn of assets under management, making it one of the world's top 10 real estate advisories. Cornerstone's US commercial real estate debt platform completed $5.7 bn in real estate transactions in 2011.

The company moved in to Europe by acquiring London-based Protego Real Estate Investors in late 2009. Charles Weeks, a co-founder of Protego, heads Cornerstone's European business.

The fixed rate,12-year Derwent London refinancing facility was arranged by loan advisory Laxfield Capital, which will also act as manager of the loan.

The financing package is secured against two assets in the Fitzrovia sub-market of London's West End: a fully let office building comprising 13,700 m² of lettable space at 2-8 Fitzroy Street, W1 and a multi-tenanted block fronting Tottenham Court Road, Warren Street and Grafton Way, which incorporates the 330-room Grafton Hotel. The average weighted unexpired lease term is 23 years.

Laxfield Capital originated, helped structure, and negotiated the deal on behalf of Cornerstone, following its appointment in July 2012 to source and manage loans for Cornerstone in the UK.

'The deal is typical of the type of opportunity Cornerstone is targeting in the UK, where it is seeking to provide property-secured senior loans, with a single property target lot size of between £25 mln and £75 mln. 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,' Cornerstone said in a statement.