The Real Deal New York

JLL’s asset management arm is betting big on commercial lending

LaSalle Investment Management acquired a majority stake in Latitude Management Real Estate Investors
November 01, 2018 12:34PM

From left: downtown Denver, Jason Kern, and Glenn Sonnenberg (Credit: Getty Images and Wikipedia)

The asset management arm of JLL is making a play at commercial lending in the U.S., acquiring a middle-market fund with deals in growing markets like Denver and San Francisco.

LaSalle Investment Management is acquiring a majority stake in Latitude Management Real Estate Investors, which manages $1.2 billion across credit funds, Bloomberg reported. Terms of the deal weren’t disclosed.

Latitude targets the middle market — lending $5 million to $35 million to multifamily, office, hotel, retail and industrial properties with upside. Latitude generally issues bridge loans.

Latitude’s debt usually spans three years, with the option for extensions. It also has floating interest rates, which is an advantage in a rising rate environment. LaSalle views the deal as a way to diversity its business — and Jason Kern, LaSalle’s CEO for the America’s, said the company had been considering an acquisition instead of building its own segment.

“By being below the radar screen of larger lenders, there’s not nearly as much competition from banks or non-bank financing providers,” Kern told Bloomberg. He described the move into the lending space a long-term play.

The deal is expected to close in the first quarter of 2019 and will be merged into LaSalle’s North America private equity platform, which manages about $21 billion of the $60 billion of LaSalle’s assets under management.

Earlier this year, a joint venture between LaSalle and Quantum Global Real Estate put its stake in the office tower at 521 Fifth Avenue on the market, as part of a push to sell $1.8 billion in global real estate. The partnership, known as Plaza Global Real Estate Partners, holds a 49.5 percent stake in the building, which it co-owns with SL Green Realty. [Bloomberg] — Meenal Vamburkar