LaSalle raises EUR 170m for UK junior loan programme

LaSalle Investment Management (LaSalle) has raised £150 mln (EUR 170 mln) for a new junior loan programme targeting newly originated loans secured against UK properties. The new capital raise brings the total discretionary capital that LaSalle has available for junior and mezzanine debt investment in the UK to over £400 mln.

Amy Aznar, head of Special Situations, LaSalle Investment Managemen: 'With over £400 mln available for junior and mezzanine debt investment, LaSalle is very well positioned to fill the debt gap as borrowers look for new sources of capital. We are able to invest in a wide variety of UK financing situations across various real estate assets and risk profiles. Our new junior debt programme is complementary to our existing Special Situations debt offer in that it looks for traditional junior debt returns at lower capital structure attachment points on core properties.

'We are seeing a growing number of opportunities to place junior debt and mezzanine at attractive risk adjusted returns. Many institutional investors see junior and mezzanine debt as attractive satellite strategies to their core real estate portfolios.'

LaSalle’s junior loan programme targets 60-75 per cent loan-to-value loans and will focus on institutional quality underlying real estate, strength of property cash flow, and quality sponsorship.

Michael Zerda, director, Special Situations, LaSalle Investment Management added: 'In 2010 we saw a number of situations where high yield mezzanine was not suitable for a number of reasons, particularly in cases where high quality property owners were in need of lower leverage that traditional senior lenders were unable to fully fund. The new LaSalle UK junior loan programme was specifically designed to fill that void in the market and is appropriately priced for borrowers needing 75 per cent loan-to-value debt facilities in an environment where many traditional lenders (due to tight regulatory capital restraints) are limiting new senior loan proceeds even on the most prime of assets.

'We do not foresee lending conditions to improve over the medium term and are working with a large number of active senior lenders to provide combined debt packages and borrowers directly on bespoke junior debt facilities.'