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New York

PacWest sells Cain $1.2B in CRE loans

London-based firm grows New York foothold with 10-piece porfolio

Pacific Western Bank's Paul Taylor, Cain International's Jonathan Goldstein (Getty, Pacific Western Bank, Cain International)
Pacific Western Bank's Paul Taylor, Cain International's Jonathan Goldstein (Getty, Pacific Western Bank, Cain International)

Pacific Western Bank found a taker for another billion in construction loans as it attempts to survive its deposit outflows.

Cain International acquired more than $1.2 billion in construction loan commitments from PacWest, the Commercial Observer reported. The London-based firm’s acquisition is focused in New York, with the majority of the undisclosed properties in New York City.

The loan portfolio includes 10 construction loans for multifamily and student housing projects with an aggregate balance of approximately $500 million. Cain decided it could shoulder the acquisition after a pullback in the immediate years after the pandemic, which executive Matt Rosenfeld told the outlet gave the firm a “clean book.”

Cain has originated more than $7 billion in global real estate debt in its nine years of business. It manages more than $15 billion in assets through real estate equity, real estate debt and private equity platforms.

One of Cain’s biggest moves in New York came a year before the pandemic, when it partnered with Bank OZK to provide $750 million in debt to Vladislav Doronin for the luxury condo conversion of the Crown Building. Cain’s $450 million loan was in the mezzanine spot of the deal.

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Last year, Doronin’s OKO Group and Cain partnered to buy a pair of co-ops in Palm Beach, Florida for a combined $146.6 million. Investors have eyed the waterfront properties as a redevelopment opportunity, wary of the safety of the older buildings.

Following the failures of Silicon Valley Bank and First Republic Bank, PacWest has been acting aggressively to stay afloat. Last week, Fairfax Financial moved in as the majority buyer of a construction loan portfolio from the bank, replacing Kennedy Wilson, which is retaining a minority stake in the debt.

Fairfax is paying $2 billion for 63 loans, which is about 95 percent of the portfolio in question. Last month, Kennedy Wilson had agreed to purchase 74 loans for $2.4 billion, discounted from the $2.6 billion principal balance of the selected loans.

— Holden Walter-Warner

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Construction LoansPacific Western BancorpReal Estate Finance