Mitsubishi Corporation (MC), through its US alternative asset management subsidiary, MC Asset Management Holdings, LLC (MCAMH) will form a new 50/50 joint venture, MC-FMC Commercial Real Estate Finance Management LLC, with Five Mile Capital Partners LLC (FMC), an asset management firm specializing in real estate debt and related products. The venture will underwrite senior commercial mortgage loans to be contributed to CMBS securitization trusts and will aim to originate over US $1 billion of loans annually.
In the US, along with Real Estate Investment Trusts (REIT), CMBS has traditionally been used as a means for investors to access the real estate market. In the wake of the financial crisis, a decrease in investor appetite, along with financial institutions having to pull out from the market, led to a large drop in CMBS issuance. Today, with a stabilizing market and investor appetite increasing again for less leveraged and conservative real estate related debt products, CMBS issuance is recovering. However, with financial institutions facing stronger regulations such as Basel III on the one hand, and the market facing maturities of those CMBS issued in 2005 – 2007 on the other hand, there is a strong need for new lenders to take the place of financial institutions.
MC, through MCAMH, aims to leverage this opportunity to enter into the CMBS origination business, providing a solution for institutional investors seeking products that are securitized by quality underlying assets, while acting as a financial intermediary between said investors and the real estate market.
MC has had a relationship with FMC over many years and believes that this venture will be able to leverage both MCAMH’s asset management capabilities and FMC’s US commercial real estate expertise.
About MC Asset Management Holdings, LLC
MCAMH is an asset management subsidiary of MC established in December, 2011 and offers alternative investment products to investors globally. MCAMH is headquartered in Stamford, Connecticut, USA.
About Five Mile Capital Partners LLC
FMC, with over US$2 billion of assets under management, is an alternative investment and asset management company established in 2003, specializing in investment opportunities in commercial real estate, debt products, structured finance, asset-based lending and financial services private equity. FMC is headquartered in Stamford, Connecticut, USA.
About the Business: Flowchart of CMBS Securitization