GLOBAL – US investment adviser Real Estate Capital Partners plans to provide mezzanine financing to German developers and has hired Thomas Etzel from BHF-Bank to lead its European expansion.
Founding partner Karin Shewer said the US would remain the company's primary investment market, but she said a combination of the financial crisis and Basel III had created a need among developers and operators for mezzanine debt – a relatively new phenomenon in the German market.
"The addition of a seasoned investor in German real estate allows us to begin to reach our company goal of expanding into markets beyond the US," Shewer said. "Our focus on the German marketplace is a result of our German ownership."
To date, Real Estate Capital Partners has allocated capital on behalf of its German investors to US investments, notably in the multi-family residential sector. Following the crisis, it also broadened its focus to include joint ventures in development projects in central business districts and transport-hub cities on the US West Coast.
"Our investors come to the US to diversify into dollar investments and to generate very attractive risk-adjusted returns,” Shewer said.
Although much of the firm’s investor base comprises German investors in the US real estate market, in recent years it has also attracted capital from US institutional investors.
They include three trade unions – International Brotherhood of Electrical Workers Local 26, International Union of Bricklayers & Allied Craftworkers, and Independence Blue Cross of Pennsylvania – which backed an unleveraged Washington development fund launched last autumn on condition that construction be carried out only by unionised workers.