LaSalle Investment Management Enters U.S. Debt Market With $1.2B Acquisition
JLL's asset management arm has jumped into the U.S. commercial real estate debt market.
LaSalle Investment Management acquired debt investors Latitude Management Real Estate Investors, which holds $1.2B in credit across multiple funds, Bloomberg reports. Latitude will be rebranded and subsumed into LaSalle's North American equity practice.
LaSalle CEO Jason Kern told Bloomberg he had initially considered building credit facilities from the company, but ultimately decided to acquire the established player to benefit from the relationships and reputations Latitude had built. Latitude's leadership, including President and CEO Glenn Sonnenberg, will remain in place for at least five years to run the debt business and retain a minority stake in the company.
Latitude's business model focuses on short-term, floating-rate loans issued for projects deemed "middle market," valued between $5M and $35M, Bloomberg reports. Within that value range, it has issued debt for projects across all commercial asset types, focusing on value-add properties for acquisition and improvement financing.
The value-add space is familiar ground for LaSalle, which has opened eight funds for equity investing in U.S. properties that fit the bill. Kern told Bloomberg he believes that deals below $35M have less competition from banks and other debt funds, which have proliferated in recent years. LaSalle will be targeting mezzanine financing and preferred equity deals to limit exposure.
LaSalle already operates debt funds in Europe, where it expanded its business in recent months by acquiring multiasset management company Aviva and its nearly $2B Encore+ fund.