Värde and Chesswood Announce Forward Flow Agreement for Equipment Loan and Lease Receivables

NEW YORK and TORONTO – Värde Partners, a leading global alternative investment firm, and Chesswood Group Limited (TSX: CHW), a specialty finance company with 40 years of experience in the commercial equipment finance market, today announced an agreement for the forward purchase of equipment loan and lease receivables originated by Chesswood subsidiaries Pawnee Leasing Corporation and Tandem Finance Inc.

“We are excited to work with Värde Partners as part of expanding Chesswood’s US equipment finance business”, said Ryan Marr, President & CEO of Chesswood.  “Värde’s deep expertise in equipment finance and long-term investment approach makes them an ideal funding partner for the Chesswood Group of companies.”

“We are pleased to support the growth of Pawnee Leasing and Tandem Finance given their respected positions and long operating history in small-ticket equipment finance,” said Aneek Mamik, Partner and Global Head of Financial Services from Värde Partners. “This funding of high quality equipment builds on our leading position in providing asset lending solutions to underserved parts of the economy. Hard asset backed financing provides particularly good downside protection in an uncertain economic environment while allowing us to participate in industries where capex spending remains robust.”

About Värde Partners

Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Founded in 1993, the firm has invested through multiple credit cycles, building on its roots in special situations and distressed to invest more than $95 billion across the credit quality and liquidity spectrum in both public and private markets. Värde currently manages over $13 billion in assets with teams in North AmericaEurope, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services. For more information, please visit www.varde.com.

About Chesswood Group Limited

Chesswood Group Limited is a holding company whose subsidiaries engage in the business of specialty finance (including equipment finance throughout North America, and vehicle finance in Canada), as well as the origination and management of private credit alternatives for North American investors. Based in Toronto, Canada, the firm is publicly traded on the Toronto Stock Exchange (TSX: CHW).

Värde Partners and Hawkins Way Capital Make Fourth Acquisition Bringing Total Capitalization of JV to Over $1 Billion in Its First Year

NEW YORK – Värde Partners, a leading global alternative investment firm, and Hawkins Way Capital, a vertically integrated real estate company, announced today the recent purchase of 525 Lexington Avenue, a 655 room non-operating hotel in the Midtown East neighborhood of Manhattan. This brings the total capitalization of the JV formed by Värde Partners and Hawkins Way Capital to over $1 billion within its first year with a portfolio of eight value-add and distressed hospitality and housing assets in major U.S. cities.  

“We are excited about the level of activity we’ve engaged in through our JV with Värde Partners. We continue to leverage our hospitality, multifamily and student housing owner-operator expertise to refresh and/or reposition assets in order to maximize value,” said Ross Walker Co-Founder and Managing Partner of Hawkins Way Capital.  

“Our strategy for the joint venture has not changed: we aim to build a high quality, inflation protected, and cash flow generative portfolio,” said Tim Mooney, Partner at Värde Partners. “Coming out of the pandemic, we continue to find distressed hospitality and select housing assets in prime locations in major gateway cities where we can drive this opportunity.” 

The 525 Lexington property is a 35-story, 406,000 square foot building currently configured as a 655 key hotel with over 16,000 square feet of meeting space, including two double height ballrooms, a large outdoor terrace on the 16th floor, a penthouse fitness center, and a large restaurant/lounge space on the ground floor. Originally called the Shelton, 525 Lexington was the world’s tallest hotel at its completion in 1923 and is designated as a landmark building in New York City. It was converted to a Marriott branded hotel in 1990 and operated as such until its closure at the beginning of the Covid-19 pandemic.  

The joint venture’s portfolio also comprises the DoubleTree by Hilton Metropolitan in the heart of Midtown Manhattan, the Sheraton Boston in the Back Bay neighborhood of Boston, and five other residential developments in New York, California, and Rhode Island.  

About Värde Partners

Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Founded in 1993, the firm has invested through multiple credit cycles, building on its roots in special situations and distressed to invest more than $95 billion across the credit quality and liquidity spectrum in both public and private markets. Värde currently manages over $13 billion in assets with teams in North America, Europe, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services. For more information, please visit www.varde.com.   

About Hawkins Way Capital

Hawkins Way Capital, co-founded by Managing Partners Ross Walker and Karan Suri, is a vertically integrated real estate company with $2.5 billion of assets under management on behalf of institutions and individuals focused on value-add and opportunistic investments across various asset classes and geographies. The company seeks niche theses targeting attractive risk-adjusted returns. Its disciplined approach leverages the principals’ investing experience and extensive network to execute strategies that offer long-term value. Hawkins Way has offices in Los Angeles and New York. For more information, please visit www.hawkinsway.com. 

Värde Partners Promotes General Counsel Andrew Malone to Partner

MINNEAPOLIS – Värde Partners, a leading global alternative investment firm, today announced that the firm’s General Counsel, Andrew Malone, has been promoted to Partner.

“We are delighted to elevate Andrew to Partner recognizing his leadership of the world-class global legal, tax and related functions he has helped build since joining the firm nearly a decade ago. Andrew is a great leader and manager, demonstrates the highest level of integrity and dedication, and brings a strategic mindset that has been instrumental in bringing solutions that add value to the firm and our LPs in the everchanging investing and asset management landscape,” said Ilfryn Carstairs, CEO and Co-CIO of Värde Partners.

Based in Minneapolis, Andrew oversees the Legal, Compliance, Audit and Tax functions globally. He has provided key leadership in a number of roles throughout his tenure at the firm and previously served as Chief Counsel – Tax and Global Funds.

Prior to joining Värde in 2014, Andrew was managing counsel at the State of Wisconsin Investment Board. Prior to that, Andrew was a member of the legal team at Black River Asset Management. He began his career as an associate in the tax group at the law firm Godfrey & Kahn.

Andrew received his B.A. from Valparaiso University and his J.D. from the University of Michigan Law School.

About Värde Partners

Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Founded in 1993, the firm has invested through multiple credit cycles, building on its roots in special situations and distressed to invest more than $95 billion across the credit quality and liquidity spectrum in both public and private markets. Värde currently manages over $13 billion in assets with teams in North America, Europe, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services. For more information, please visit www.varde.com.

Flynn Properties and Värde Partners Acquire 80% Interest in 89 Select Service and Extended Stay Hotels

SAN FRANCISCO & MINNEAPOLIS – Flynn Properties Inc., owner of commercial real estate, luxury resorts and select service hotel properties in America and abroad, in a joint venture with Värde Partners, a leading global alternative investment firm, today announced that it has acquired an 80% joint venture interest in 89 select service and extended stay hotels in a $1.1 billion implied total enterprise value transaction from affiliates of Highgate and Cerberus Capital Management, L.P. (“Cerberus”).

With properties located throughout the United States, the portfolio comprises 58 Marriott-branded hotels, 24 Hilton-branded hotels, 4 Radisson-branded hotels, 2 IHG-branded hotels and 1 Choice-branded hotel, which will undergo capital improvements over time. Affiliates of Highgate and Cerberus will retain a 20% interest in the investment, and Highgate will continue to manage the properties on behalf of the joint venture. This is the second joint venture between Flynn Properties and Värde Partners; last year the partners acquired a portfolio of 20 Marriott- and Hilton-branded select service hotels from Apple Hospitality.

“We are excited to announce the addition of these hotels to our portfolio,” said Greg Flynn, Founder, Chairman and Chief Executive Officer of Flynn Properties. “This acquisition is part of a broader business strategy of Flynn Properties to increase its limited service hotel footprint, which has proved to be one of the best performing sectors in the industry. We are also excited by the caliber of properties included in this deal, as the portfolio’s brands are global hospitality icons known for hosting some of the world’s most loyal travelers for business and leisure while offering exceedingly robust guest loyalty programs, which we believe will be a key source of guest revenue and retention. Flynn Properties and Värde Partners are thrilled to execute this transaction with Highgate and Cerberus, and to work going forward with the many important franchisors and associates across the portfolio.”

This acquisition will bring Flynn Properties’ limited service hotel portfolio to 115 properties. Flynn Properties is a division of San Francisco-based Flynn Holdings, which has two principal businesses: real estate and restaurants. Flynn Properties’ prior hotel investments include numerous limited service and extended stay hotels as well as five super-luxury resorts: Esperanza and the Chileno Bay Resort, both located in Los Cabos, Mexico, the Carneros Resort & Spa and Solage, both located in the Napa Valley, and the Hotel Madeline in Telluride, Colorado. Its commercial investments consist primarily of tech-oriented office buildings on the West Coast which have totaled over 3 million square feet. Its affiliate, Flynn Restaurant Group LP, is the largest franchise restaurant operator in the world and one of the 20 largest foodservice companies of any kind in the United States, owning and operating 2,400 restaurants in 44 states generating $4 billion in sales and employing approximately 73,000 people.

“The hotel sector continues to strengthen amidst a complex macro backdrop, demonstrating its ability to offer investors the potential for growing, inflation-protected cashflows. These properties recovered quickly from the pandemic and have been performing well, indicative of the quality of their brands and the continued demand for limited service and extended stay hotels,” said Tim Mooney, Global Head of Real Estate at Värde Partners. “As this cycle continues to evolve, we believe there will be further opportunities to invest selectively in high-quality assets that are well positioned to capitalize on the robust demand for business and leisure travel. We are pleased to partner for the second time with Flynn Properties to acquire this interest in another portfolio of properties in attractive locations with compelling market supply/demand dynamics.”

Deutsche Bank Securities Inc. served as financial advisor to Flynn Properties and Värde Partners on this transaction.

About Flynn Properties Inc.

Flynn Properties Inc. has substantial experience in commercial and hospitality real estate investment. Founded in 1994 and based in San Francisco, CA, Flynn Properties has owned in excess of 3 million square feet of tech-oriented office buildings on the West Coast. In addition to 115 premium-branded select service and extended stay hotels, Flynn Properties’ hospitality investments also include the luxury resorts Esperanza and the Chileno Bay Resort, both located in Los Cabos, Mexico, the Carneros Resort and Solage, both located in the Napa Valley, and the Hotel Madeline in Telluride. Its affiliate, Flynn Restaurant Group LP, is the largest franchise restaurant operator in the world and one of the 20 largest foodservice companies of any kind in the United States, owning and operating 2,400 restaurants in 44 states generating $4 billion in sales and employing approximately 73,000 people. For more information, visit www.flynnholdings.com.

About Värde Partners

Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Founded in 1993, the firm has invested through multiple credit cycles, building on its roots in special situations and distressed to invest more than $90 billion across the credit quality and liquidity spectrum in both public and private markets. Värde currently manages over $13 billion in assets with teams in North America, Europe, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services. For more information, visit www.varde.com.

Värde Wins CMBS Deal of the Year Award for Industry’s First Hotel-Backed CRE CLO

NEW YORK – Värde Partners is honored to win CMBS Deal of the Year as part of GlobalCapital’s 2022 U.S. Securitization Awards.

The annual awards recognize the most notable deals and market participants as voted on by peers, from shortlists compiled by GlobalCapital’s editorial team.

Värde’s VMC Finance 2021-HT1, a $527 million CRE CLO closed in December 2021, was an industry first being entirely backed by hotel assets. The build-to-suit transaction provided investors with access to what the firm views as a unique pocket of the hospitality market and a highly attractive collection of properties. As a result of robust underwriting on a deal-by-deal basis, Värde was able to provide CLO-style investor protections and low-leverage asset quality, similar to deals in the single-asset, single-borrower (SASB) space.

“It is an honor to be recognized by our peers for this first-of-its-kind transaction that we structured with investors in mind. We would like to thank the teams at Credit Suisse, J.P. Morgan, Dechert and Cadwalader for their important partnership,” said Melissa Band, Director on Värde’s Capital Markets team.

Jim Dunbar, Partner and Head of Real Estate Lending, added: “The success of this deal, we believe, speaks to the growth and maturity of the CRE CLO market. We continue to see both an increased demand for flexible capital that we provide to established owners of real estate assets as well as a strong appetite for our CRE CLO products, and we are pleased to help meet those needs.”

The securitization consisted of 10 floating-rate mortgages originated by Värde’s CRE lending platform and secured by 11 hospitality properties. Many of the loans were transitional in nature, helping properties bridge to a post-pandemic recovery.

Värde funded over $1 billion of real estate loans in the hospitality sector in 2021.


Värde’s CRE Lending Program

Värde has 28 years of experience investing in real estate and credit markets and has originated $6 billion in CRE loans since 2017. The firm has a dedicated team of experienced origination, asset management and capital markets professionals.

Through its CRE lending program, Värde is a non-recourse, balance sheet lender financing all major asset classes, plus mixed-use and self-storage. Värde focuses on providing flexible capital and certainty of execution to meet the needs of experienced real estate investors.

The firm has a clean securitization track record, having experienced zero losses to date, no overcollateralization test breaches, and six of its ten securitizations successfully paid off.


About Värde Partners

Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Founded in 1993, the firm has invested through multiple credit cycles, building on its roots in special situations and distressed to invest more than $90 billion across the credit quality and liquidity spectrum in both public and private markets. Värde currently manages over $13 billion in assets with teams in North America, Europe, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services. For more information, please visit www.varde.com.

 

Awards referenced do not reflect the experiences of any Värde client and readers should not view such information as representative of any particular client’s experience or assume that they will have a similar investment experience as any previous or existing client. Awards are not indicative of the past or future performance of any Värde product or service and should not be relied upon as any indication of future performance of Värde or any of its funds. This information is provided solely for background purposes and should not be used as a basis for an investment decision regarding an investment in any Värde product or service. The methodology for the GlobalCapital U.S. Securitization awards is as follows: The awards are based on thousands of votes cast in GlobalCapital’s annual poll comprised of industry participants. GlobalCapital called for industry participants to nominate deals for several categories, and GlobalCapital’s editorial team compiled a shortlist for each category. Market participants then voted in each category in March/April 2022. The selection of Värde to receive the award was based in part on subjective criteria and a limited universe of candidates, and therefore there can be no assurance that a different global editorial team or voters might not have selected other firms or transactions as the winners.

Värde Partners Finances $747 Million of Commercial Real Estate Loans in the First Half of 2022

MINNEAPOLIS and NEW YORK – Värde Partners, a leading global alternative investment firm, today announced it closed $747 million in U.S. commercial real estate (CRE) loans across 16 transactions in the first half of 2022. The transactions span multifamily, hospitality, office, and industrial assets throughout the U.S.

“Despite headwinds created by rising rates, market fundamentals for CRE remain strong. This is especially true in the multifamily space where we see significant, sustained rental demand, fueled by U.S. population growth and the undersupply of housing. We continue to lend on well-located assets with strong sponsorship,” said Jim Dunbar, Partner and Head of Real Estate Lending at Värde.

Värde manages a $4 billion portfolio of first mortgages across CRE sectors. The firm’s multifamily approach has recently focused on lending in high-growth sunbelt markets and infill locations around larger cities.

“Across asset types, borrowers are increasingly relying on non-bank lenders like Värde for bridge and transitional loans to achieve their business plans. We believe the types of flexible financing solutions that Värde provides will continue to play a key role for the CRE industry as asset owners navigate a dynamic market and reposition assets coming out of the pandemic,” Jim added.

Loans Closed in the First Half of 2022

  • $80 million for the refinance of a hotel property in Fort Lauderdale, FL.
  • $72 million for the acquisition of a multifamily property in Tampa, FL.
  • $64 million for the refinance of an office property in Raleigh, NC.
  • $57 million for the acquisition of a multifamily property in San Antonio, TX.
  • $55 million for the acquisition of a multifamily property in Torrance, CA.
  • $55 million for the acquisition of a multifamily property in Tampa Bay, FL.
  • $50 million for the acquisition of a hotel property in Rancho Santa Fe, CA.
  • $45 million for the construction of a multifamily portfolio in Irvine, CA.
  • $44 million for the acquisition of a multifamily property in Fountain Hills, AZ.
  • $43 million for the acquisition of a multifamily property in Kingwood, TX.
  • $32 million for the acquisition of a hotel property in Miami Beach, FL.
  • $31 million for the acquisition of a multifamily property in Tucson, AZ.
  • $31 million for the acquisition of a hotel portfolio in Ann Arbor, MI.
  • $30 million for the acquisition of an industrial portfolio in Spartanburg, SC.
  • $30 million for the acquisition of a hotel property in Miami, FL.
  • $28 million for the acquisition of a multifamily property in Bellevue, WA.

Värde’s CRE Lending Program

Värde has 28 years of experience investing in real estate and credit markets and has originated $6 billion in CRE loans since 2017. The firm has a dedicated team of experienced origination, asset management and capital markets professionals.

Through its CRE lending program, Värde is a non-recourse, balance sheet lender financing all major asset classes, plus mixed-use and self-storage. Värde focuses on providing flexible capital and certainty of execution to meet the needs of experienced real estate investors.

The firm has a clean securitization track record, having experienced zero losses to date, no overcollateralization test breaches, and six of its ten securitizations successfully paid off.

About Värde Partners

Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested $90 billion since inception and manages over $13 billion on behalf of a global investor base. The firm’s investments span corporate and traded credit, real estate and mortgages, private equity, and direct lending. Värde has offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.varde.com.