Prudential Mortgage Capital Company has closed a $108 million commercial real estate loan in the U.K., the first financing since launching its European business earlier this year. Prudential Mortgage Capital Company is the commercial mortgage lending business of Prudential Financial, Inc. (NYSE: PRU).
The loan is secured by a portfolio of U.K. properties: four multi-tenanted office properties in central London and a grocery-anchored retail property in the historic town of Bath. The 11-year financing marks Prudential’s first secured commercial real estate debt transaction in Europe since the opening of its London advisory office in January 2012. The portfolio’s sponsor, the O&H Group, is a family run business with considerable real estate holdings and development projects in central London and throughout the U.K.
In 2012 Prudential is targeting $500 million (£325 million, €400 million) of long-term, fixed-rate senior debt transactions in Europe, with the ability to do significantly more than this. The European program is similar to the loan structures the company offers in the U.S., and as in the U.S., there is the ability to fund individual transactions of significant size. All debt will be denominated in local currency and secured by income-producing real estate. Initially the company is focusing on office, logistics, multifamily, and retail properties in and around large population centers such as London, Paris, and the major cities in Germany. On the European continent such financing transactions may also be structured in collaboration with local banks.
“The diversification we can achieve by investing a portion of our portfolio outside of the U.S., whether it’s Europe, Japan, or Mexico, is very valuable,” said Thor Orndahl, a managing director who oversees Prudential Mortgage Capital Company’s non-U.S. mortgage platform. “The current market dislocation has provided the opening we have been looking for, and our plan is to be active in Europe for many years to come.”
Drew Abernethy, head of European Origination advice, said, “Prudential is very pleased to have closed this first transaction so soon after introducing their its European program. It illustrates the strength of the Prudential platform globally, a commitment to Europe specifically, and an earnest belief that clients like O&H should have access to the type of long-term financing that they want.”
Established in 1982, the O&H Group is a privately owned business with more than 50 employees and net assets exceeding £600 million. Headquartered in Mayfair, the key principals have worked together for decades building a large development and core property portfolio. “We have been extremely impressed by the way the Prudential team understood and accommodated our long term business requirements and we are delighted to be involved in their first European transaction. We look forward to building on this relationship,” said David Gabbay, Chairman of the O&H Group.
Prudential Mortgage Capital Company is a national full-service, commercial and multifamily mortgage finance business with $72 billion in assets under management and administration as of March 31, 2012. Leveraging a 135-year history of real estate finance, the company offers one of the most comprehensive lines of real estate finance products and originates loans for Fannie Mae DUS®, Freddie Mac Program Plus® and specialized affordable housing programs; FHA; Conduit; Prudential’s general account and proprietary balance sheet program; and other institutional investors. The company maintains a loan servicing portfolio of approximately $68.8 billion, as of March 31, 2012. For more information, please visit http://www.prumortgagecapital.com.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $943 billion of assets under management as of March 31, 2012, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/.