Blue Owl scales into private credit amid CRE lending challenges

Marc Zahr’s Blue Owl Capital is in the midst of a shake-up in response to an evolving commercial real estate landscape.

The New York-based investment asset management firm, which has a heavy presence in Chicago, aims to scale into commercial real estate private credit through a mix of acquisitions, hires and other tactics, Real Estate Capital USA reported. 

Blue Owl will look to originate loans, pursue deals on the securitized market and purchase loans from traditional lenders to beef up its debt book. 

This shift in strategy is driven by the tight lending standards and rising interest rates that continue to plague commercial real estate, crushing property values and hindering sales, while also making it tough for landlords to refinance their assets. 

“The world has changed rapidly,” Zahr, a Chicago resident and co-president of Blue Owl, told the outlet. “And what we have seen is the lending landscape has shifted and given us a great entry point to do a new-to-us real estate finance strategy.”

Blue Owl recently acquired Scarsdale, New York-based advisory firm Prima Capital Advisors from Connecticut-based Stone Point Capital for $170 million. Prima, which primarily invests in commercial mortgage-backed securities, managed $10 billion in assets at the time of the acquisition, with its investor base comprising an array of institutional investors and high-net-worth individuals.

The firm is also in the process of hiring Jesse Hom to lead its real estate lending division, effective June 17, the outlet said. Hom serves as global head of real estate credit for Singapore-based wealth fund GIC. 

Notably, Blue Owl bought and leased back the ground beneath at the Chicago Tribune’s former Freedom Center printing plant, which gaming company Bally’s is demolishing to make way for the city’s first casino development. 

—Quinn Donoghue 

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