Temasek and CenterSquare launch US$100 million commercial real estate debt co-investment vehicle

The portfolio continues a strategy across the global real estate investment manager’s debt fund series

TEMASEK and CenterSquare Investment Management have launched a US$100 million commercial real estate debt co-investment vehicle that will invest in commercial real estate loans.

Once fully funded, the vehicle will have US$200 million to deploy and will invest in high-quality subordinate real estate loans, CenterSquare said on Tuesday (Feb 4).

The portfolio continues a strategy across the global real estate investment manager’s debt fund series, which seeks to generate risk-adjusted, equity-like returns through mezzanine loans and debt-like preferred equity investments, it added.

The first tranche of capital will invest alongside CenterSquare’s most recent debt fund in largely pre-identified deals.

As with other funds in its series, it will focus on multifamily assets, while maintaining flexibility to respond to changing market conditions.

Michael Boxer, managing director of CenterSquare’s Private Real Estate Debt vertical, said: “In the current higher-rate environment, we continue to see many borrowers in need of ‘gap capital’ as loans come due, and they are no longer able to secure the same level of mortgage loan proceeds that were available previously in the lower-rate climate.”

Richard Gorsky, managing director, Private Real Estate Debt, said: “Now is one of the best times I’ve seen in my career to invest in commercial real estate debt.”

“The convergence of several factors, including the reconstitution of the borrower’s capital stack and resetting valuations, combined with the favourable fundamentals across residential subsectors, underpin this timely co-investment opportunity,” he added.

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