Prudential Financial Inc.’s asset management business has completed more than $4B worth of land-banking deals through a partnership that aims to provide more flexible financing for U.S. homebuilders.
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Prudential’s PGIM partnered with Domain Real Estate Partners LLC last year, and they have so far financed seven residential land bank transactions. The completed deals are part of an asset-based financing strategy in which loans are written against physical assets rather than going directly to a company, Bloomberg reported.
PGIM has experienced growing borrower demand for asset-based financing across sectors, according to Oliver Nisenson, PGIM head of private asset-based finance.
“Our partnership with Domain allows us to deliver capital solutions for homebuilders outside of traditional bank financing to help accelerate housing development in the U.S.,” Nisenson said in a statement.
Instead of homebuilders selling empty lots to financing partners, asset-based lenders offer steady capital and the underwriting expertise that allows those developers to concentrate on manufacturing homes, Nisenson said.
Domain Chief Investment Officer Bob Clark said the transactions completed with PGIM have offered homebuilders “flexible, reliable financing solutions.”
PGIM has been expanding its private asset-based finance platform and has completed asset-based finance deals across residential mortgages, fund finance, consumer credit, commercial finance and digital infrastructure.
“Asset-based finance represents one of the most compelling growth opportunities across today’s credit landscape,” Gabriel Rivera, PGIM co-head of securitized products, said in a statement.
In the digital infrastructure realm, PGIM this month provided asset-based financing for Stonepeak’s purchase of a business from Bank of Montreal that finances trucks, trailers and equipment, Bloomberg reported.
PGIM has also been active as a joint venture partner over the last 14 months.
Trammell Crow Co. and PGIM broke ground on a 316K SF industrial park in Dallas-Fort Worth late last year. And last September, SL Green and PGIM closed on a $1.4B CMBS loan for a 2.3M SF office tower in Manhattan's Flatiron District.
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