A global investment management firm has taken over a majority stake in a Chicago firm that’s readying a $400 million fund aimed at distressed real estate.
Conning signed the deal to buy the stake of Chicago-based Pearlmark Real Estate to take control of the firm, CoStar reported. Pearlmark will still run autonomously under the leadership of Stephen Quazzo and Doug Lyons, who lead its investment team.
Conning CEO Woody Bradford touted Pearlmark “extensive real estate knowledge and significant experience” working with insurance companies and other institutional clients on real estate deals as the lures for his firm’s purchase.
In June, Pearlmark closed on an $11.1 million subordinated debt investment for a 336-unit multifamily property in Dallas, and has made more than 100 similar loans since 2001, focusing on mezzanine debt. Over the last 21 years, Pearlmark originated 137 high-yield debt deals totaling about $1.8 billion, according to its website.
Pearlmark plans to raise $400 million to invest in distressed properties across the Chicago area, a move similar to those by other big real estate players such as Greystone amid rising interest rates and a record amount of debt.
Early this month, apartment developer Patrick Carroll launched a venture to provide rescue capital to apartment owners across the Sun Belt. The platform plans to invest $250 million in equity to troubled borrowers.
Greystone last week said it formed a venture with Inlet Real Estate Capital to provide short-term distress financing to struggling owners. And Barry Sternlicht’s Starwood Capital is looking to deploy some of the more than $10 billion it raised last year to place bets on distressed real estate, describing an environment he says will provide “incredible opportunities” in companies with “broken balance sheets but not broken assets.”
The Conning-Pearlmark deal is expected to close by early 2023.
Read more
Residential
Texas
Pearlmark closes on $11.1M subordinated debt investment for multifamily development in North Dallas
— Victoria Pruitt