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RXR Realty is moving further into the lending space, forming a joint venture with a Canadian pension fund.
The venture will begin with $300M of equity, Commercial Observer reports, and will invest across the office, residential, industrial and retail markets.
RXR declined to name the fund involved; however, RXR Realty President and Chief Financial Officer Mike Maturo told the publication it will generally make mezzanine debt and preferred equity investments.
“The investment market still has this bid-ask gap, so we see it as a good opportunity to participate in the lending market,” Maturo told CO, adding the firm will be focusing on structured finance investments in the New York metro region. “There are good developers and sponsors out there who are smaller players but have a good history in their respective markets and have difficulty accessing both equity and debt capital. We can play into their situations."
The firm will lend sums from $50M up to $500M, according to Maturo.
RXR agreed to lend $465M to Extell Development for One Manhattan Square in 2016. However, RXR downzined the loan by $163M later that year, The Real Deal reported.
Banks have tightened lending on real estate projects in recent years, and there is an increasing number of real estate companies doubling down on lending.
Last year, the Moinian Group announced it was launching its own lending vehicle. Kushner Cos. and Related have both operated lending arms for some time. SL Green Realty has a long history of operating as a developer-slash-lender.
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