JLL Launches Debt-Focused REIT as Commercial Loan Distress Climbs
JLL filed to register JLL Property Finance Trust with the SEC this month, creating a nontraded REIT that will originate, acquire, manage and dispose of commercial real estate debt. LaSalle Investment Management, part of the JLL parent company, will operate the Maryland-based vehicle under an advisory agreement. Shares are being offered through a blind pool on a continuous basis rather than through traditional registered public offerings.
The REIT will primarily invest in debt backed by multifamily, industrial, select retail, self-storage, single-family rental, senior housing, life sciences, manufactured housing, mixed-use and healthcare properties. It may also allocate capital to CMBS and collateralized loan obligations. Once capital is substantially deployed, the REIT expects to operate with 60% to 80% leverage and target loan-to-value ratios between 60% and 75% on senior core-plus loans, with LTVs up to 85% on subordinated positions.
The launch arrives as borrowers face mounting refinancing pressure. The CMBS special servicing rate rose 33 basis points to 11.42% in August, the highest level since 2013, with 16.9% of office loans and 13.6% of large mall debt in special servicing, according to Trepp. Borrowers who secured loans in 2020 or earlier are refinancing into a market where the 10-year Treasury yield hovers around 5%, its highest since 2007.
The post JLL Launches Debt-Focused REIT as Commercial Loan Distress Climbs appeared first on Propmodo.
