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.

Taylor Morrison and Värde Partners Scale $850 Million Build-to-Rent Joint Venture with Nine Asset Closings Since Inception

SCOTTSDALE and MINNEAPOLIS —Taylor Morrison Home Corporation (NYSE: TMHC), a leading national land developer and homebuilder, and Värde Partners, a leading global alternative investment firm, are pleased to share that they have quickly scaled their Build-to-Rent joint venture. In the first several weeks since the venture’s inception, it has closed on nine assets across Texas, Florida, North Carolina and Arizona.

As previously announced in April, the joint venture was established to develop rental properties as a part of Taylor Morrison’s Build-to-Rent program. The venture includes $850 million in equity commitments, funded 60 percent by Värde Partners and 40 percent by Taylor Morrison. The agreement provides Värde with the exclusive opportunity to invest in the acquisition and development of Build-to-Rent projects identified by Taylor Morrison that meet the venture’s investment guidelines.

The capital will help finance the ongoing expansion of Taylor Morrison’s Build-to-Rent program, which began in 2019 through a branding and servicing relationship with Christopher Todd Communities, a successful early adopter of innovative, luxury rental communities.

“The growth in demand for rental housing in high quality suburban areas continues to outpace supply, creating substantial opportunities for institutional capital,” said Brendan Bosman, Senior Managing Director at Värde Partners.

“This vehicle offers the ability to efficiently scale our Build-to-Rent platform to capitalize on the attractive market dynamics in the horizontal rental arena with a known and respected capital partner. We believe we are in early innings of the evolution of this attractive space and remain very excited about its growth prospects,” said Erik Heuser, Taylor Morrison EVP and Chief Corporate Operations Officer.

In July 2021, the firms also entered into a land banking facility agreement to acquire and develop residential lots across the homebuilder’s markets of operation. Värde and Taylor Morrison have closed on 6,800 lots under the arrangement in 11 markets.

Värde Partners has 28 years of experience investing in real estate with substantial equity and credit investments in residential land development and homebuilding transactions. The Build-to-Rent joint venture and land banking facility will further increase Värde’s U.S. housing footprint in its target markets.

About Taylor Morrison

Headquartered in Scottsdale, Arizona, Taylor Morrison is one of the nation’s leading homebuilders and developers. We serve a wide array of consumers from coast to coast, including first-time, move-up, luxury, and 55-plus active lifestyle homebuyers under our family of brands—including Taylor Morrison, Esplanade, Darling Homes Collection by Taylor Morrison, and Christopher Todd Communities built by Taylor Morrison. From 2016-2022, Taylor Morrison has been recognized as America’s Most Trusted® Builder by Lifestory Research. Our strong commitment to sustainability, our communities, and our team is highlighted in our latest Environmental, Social and Governance (ESG) Report on our website. For more information about Taylor Morrison, please visit www.taylormorrison.com.

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.

Värde Partners Finances $2.7 Billion of Commercial Real Estate Loans in 2021

MINNEAPOLIS and NEW YORK – Värde Partners, a leading global alternative investment firm, today announced it closed $946 million in U.S. commercial real estate (CRE) loans across 14 transactions in the fourth quarter of 2021. In total, Värde’s CRE lending platform originated over $2.7 billion in 2021, spanning hospitality, office, multifamily, industrial and mixed-use assets.

Värde expects the elevated demand for U.S. CRE loans to continue into 2022 with favorable supply/demand dynamics against the backdrop of a CRE CapEx cycle. From population growth and a migration to the Sunbelt states, to continued changes in travel and questions around office space requirements, most properties are faced with addressing a number of new or accelerated trends, resulting in a significant need for transitional debt capital.

“The way people are using commercial real estate is fundamentally changing, requiring landlords and tenants alike to evaluate how they utilize assets and reposition for the post-pandemic environment. This is driving a significant and growing demand for shorter-term transitional or bridge real estate loans, with borrowers increasingly looking to alternative lenders like Värde to structure the right loan for their property. We believe the types of flexible financing solutions Värde provides will continue to be important over the coming year as the market adjusts to new behaviors and tenant demands,” said Jim Dunbar, Partner and Head of Real Estate Lending at Värde.

Fourth Quarter Loans

Loans closed over the quarter include:

  • $148 million for the refinance of a hospitality property in San Diego, California.
  • $120 million for the acquisition of a hospitality property in Miami, Florida.
  • $115 million for the acquisition of a multifamily property in St. Petersburg, Florida.
  • $110 million for the acquisition of a hospitality property in Phoenix, Arizona.
  • $88 million for the refinance of a hospitality property in Montauk, New York.
  • $69 million for the acquisition of a multifamily property in Houston, Texas.
  • $53 million for the refinance of a hospitality property in Washington, DC.
  • $52 million for the refinance of a multifamily property in Lewisville, Texas.
  • $47 million for the refinance of a hospitality property in Fort Lauderdale, Florida.
  • $35 million for the acquisition of a student housing property in Miami, Florida
  • $29 million for the acquisition of a multifamily property in Carlsbad, California.
  • $29 million for the refinance of a hospitality property in Aurora, Colorado.
  • $28 million for the refinance of a multifamily property in Los Angeles, California.
  • $23 million for the refinance of an office property in Los Angeles, California.


Värde’s CRE Lending Program

Värde has 28 years of experience investing in real estate and credit markets and has originated over $5 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.

In 2021, Värde closed the first-ever fully hotel-backed CRE CLO at $527 million, which was comprised of 11 loans originated to help hospitality properties bridge to a post-pandemic recovery, as well as the firm’s largest CRE CLO at $928 million.

The firm has a clean securitization track record, having experienced zero losses to date, no overcollateralization test breaches, and five of its nine 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 $85 billion since inception and manages approximately $14 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.

Värde Partners Closes First Hotel-Backed CRE CLO at $527 million

MINNEAPOLIS and NEW YORK – Värde Partners, a leading global alternative investment firm, today announced the closing of the first commercial real estate collateralized loan obligation (CRE CLO) to be entirely hotel-backed. This is Värde’s fifth CRE CLO, and ninth securitization of commercial real estate collateral.

The underlying loans were originated by Värde’s commercial real estate lending platform, through which the firm has funded more than $1 billion of real estate loans in the hospitality sector in 2021.

The securitization’s asset pool has an aggregate initial principal balance of $527 million and consists of 10 floating-rate mortgages secured by 11 full-service hospitality properties. The properties span nine states with an average principal balance of approximately $53 million. Värde offered $208 million of AAA rated bonds and $187 million of non-rated bonds.

“Värde’s strategy for this offering is based on our fundamental view of the hotel industry’s recovery over a two- to four-year period, which we expect will differ across markets and asset types. By applying a robust underwriting process to evaluate market dynamics, geographic trends, and sponsor quality on a deal-by-deal basis, we have been able to package in this transaction what we view to be a highly attractive collection of properties,” said Jim Dunbar, Senior Managing Director at Värde. “This transaction allows us to further expand our lending platform, providing additional borrowers with flexible, reliable and much-needed capital in this challenging environment while underscoring the strength of the CRE CLO market and the heightened demand for alternative lenders.”

Värde’s CRE Lending Program

Värde has 28 years of experience investing in real estate and credit markets and has originated over $5 billion in commercial real estate loans since 2017. The firm has a dedicated team of experienced origination, asset management and capital markets professionals.

Through its commercial real estate 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.

In May, Värde closed its fourth and largest CRE CLO at $928 million. The asset pool consisted of 23 floating-rate mortgages secured by 29 commercial properties.

The firm has a clean securitization track record, having experienced zero losses to date, no overcollateralization test breaches, and five of its nine 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 $85 billion since inception and manages $14 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.