Värde and Hawkins Way Form $1 Billion Joint Venture to Acquire Value-Add and Distressed Hospitality and Housing Assets

JV seeded with four residential development investments in New York and California, and has acquired the DoubleTree by Hilton Metropolitan in Manhattan
Additional $500 million equity commitment to acquire and operate hospitality and housing / residential assets in major U.S. cities

NEW YORK – Värde Partners, a leading global alternative investment firm, and Hawkins Way Capital, a vertically integrated real estate company, today announced they have formed a joint venture to acquire more than $1 billion of value-add and distressed hospitality and housing assets in major U.S. cities. The assets will operate under a Hawkins Way affiliate.

The JV, through an affiliate, recently purchased 569 Lexington Avenue in the heart of Midtown Manhattan, New York from RLJ Lodging Trust. Currently a non-operating 764-key hotel, the 19-story, 349,280 square foot building was previously a DoubleTree-branded hotel focused on corporate and business travel.

“There is a limited supply of affordable lifestyle hospitality and residential products in the center of U.S. gateway cities, against a market of unfulfilled and growing consumer demand. With a structural dislocation in values of select assets in these markets, we believe there is a significant opportunity to acquire properties at attractive prices,” said Francisco Milone, Partner at Värde Partners. “We welcome the opportunity to continue our partnership with Hawkins Way and combine our expertise in sourcing, repositioning and managing real estate assets to unlock this opportunity.”

The JV will also be seeded with operating properties in San Francisco, Oakland, and two in Brooklyn.

Ross Walker, Managing Partner at Hawkins Way Capital, added: “The pandemic has had a profound impact on certain hotel and overlooked housing assets, leaving many in financial difficulty and ultimately unviable in their current form. This has led to a window of opportunity to acquire properties at a discount to intrinsic and potential value, with a view to repositioning the assets for higher, better uses. The partnership with Värde will help support the growth of our platform as we seek to capitalize on what we believe is a large and scalable investment opportunity.”

Lazard acted as exclusive financial advisor to Hawkins Way and the partnership in this transaction.

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.

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 over $1 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.

Grupo La Finca to Acquire Värde Partners’ Stake in La Finca Global Assets

MADRID – Grupo La Finca (“GLF”), the majority owner of La Finca Global Assets (“LFGA”), today announces that it has agreed to acquire an additional 38% stake in the business from Värde Partners, a leading global alternative investment firm, for €130 million with €2 million conditional on achieving certain targets by LFGA during 2022.

LFGA owns 11 buildings in Madrid’s central business district as well as LaFinca Business Park, one of the largest business parks in Europe located in Pozuelo de Alarcón, offering more than 225,000 square meters of office space.

Värde Partners initially purchased its stake in LFGA in December 2016. Over the last five years the company has taken a number of steps in an effort to unlock and create value, strengthening its financial position and making a series of governance and operational improvements to position the company as a leader in the office rental sector. This culminated in the registration of LFGA under SOCIMI, the Spanish legal regime for REITs, in 2017, with the shares subsequently listed on the Mercado Alternativo Bursátil in 2019.

“Through our partnership with GLF we have successfully implemented a series of value creation initiatives that have grown our investment and helped establish LFGA as a leading provider of office space in Madrid,” said Tim Mooney, Partner and Global Head of Real Estate at Värde Partners. “LFGA has continued to perform well, despite the challenges facing the office sector, and we believe it is well-positioned to capitalize on the economic recovery when Spain emerges from the pandemic.”

During the period leading up to Covid-19 the company substantially increased revenue and profitability, and has remained profitable throughout the pandemic. In addition, the company has maintained its capex program to improve the quality and energy efficiency of key assets. Three business parks – LaFinca Business Park, LaFinca CMS Business Park and LaFinca MV52 – have received a BREEAM sustainability rating of Very Good or Excellent.

Susana Garcia-Cereceda, President of LFGA and GLF, added: “Over the last five years Värde and LaFinca have collaborated closely for the ongoing improvement of LFGA and its financial performance. The purchase of Värde’s 38% stake marks the end of the company’s relaunch phase and I’d like to thank them for the trust and support they’ve given to both me and the management team. The decisions we’ve made together have helped improve the assets, adapting them to the new demands of our clients even in very complicated circumstances. I look forward to the opportunity to work with Värde again in the future.”

The deal is expected to be completed in the first quarter of 2022.

About Värde Partners

About LaFinca

LaFinca is a leading company in the Real Estate sector in Spain, with activities in both residential development and the management of its prime office assets in Madrid. LaFinca has positioned itself as the benchmark brand in exclusive homes. For more information visit www.lafinca.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 Agrees to Sale of GCX to 3i Infrastructure

SINGAPORE – Värde Partners, a leading global alternative investment firm, today announced that an investor consortium including Värde, Bardin Hill Investment Partners LP and Portsea Asset Management, has agreed to sell its stake in GCX Holdings Limited (“GCX”), a leading global data communications service provider and owner of one of the world’s largest private subsea fiber optic networks, to 3i Infrastructure plc. 3i Infrastructure will be investing c.$512m to acquire 100% of GCX.

GCX provides high-bandwidth connectivity to a range of blue-chip customers including hyperscalers, telecommunications operators, new media providers and enterprises. Its 66,000km of cables span 46 countries from North America to Asia, with a particularly strong position on the Europe-Asia and Intra-Asia routes.

“Having initially invested as a bondholder in GCX, we were pleased to support the company’s recapitalization and continue working with the business in our capacity as a shareholder,” said Sandeep Chandak, Managing Director at Värde Partners. “GCX’s successful restructuring, led by Värde in 2019, reflected our belief in GCX asset’s long-term value and the underlying strength of the business. As the company’s largest shareholder, we have worked closely with Bardin Hill, Portsea and other stakeholders to unlock the potential of the business by enhancing its operating model and capitalizing on the critical role GCX plays connecting markets across the world.”

Pratik Desai, Partner at Bardin Hill Investment Partners LP, added, “We invested in GCX because we recognized the tremendous potential of the business over the long-term and our ability to help reposition the company to realize that potential. We are pleased with the positive momentum of the business over the past two years, during which time we worked collaboratively with Värde and Portsea to instill a best-in-class, experienced management team, improve operational efficiencies and ensure GCX was best positioned for continued success. We are confident in 3i Infrastructure’s ability to lead GCX through its next chapter and look forward to watching the company continue to grow its leadership position in the global data communication sector for years to come.”

The transaction is expected to be completed by mid-year 2022 subject to customary conditions and regulatory approvals.

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 employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.varde.com.

About Bardin Hill

Bardin Hill is a leading investment management firm with core competencies in opportunistic, performing, and private credit, as well as event-driven strategies. Based in New York, Bardin Hill currently manages $6 billion and employs approximately 65 professionals dedicated to rigorous investment analysis, extensive due diligence, and a disciplined approach to capital formation. For more information, please visit www.bardinhill.com.

Taylor Morrison and Värde Partners Agree to Land Banking Facility and Joint Venture

Capital will be used to acquire and develop land in the homebuilder’s markets

SCOTTSDALE and MINNEAPOLIS —Taylor Morrison Home Corporation (NYSE: TMHC), the nation’s fifth largest homebuilder, and Värde Partners, a leading global alternative investment firm, have entered into a land banking facility agreement and agreed to a joint venture, opening more than $1 billion in capacity, with the intent to grow, for new land opportunities. Through this strategic relationship, Värde will continue aligning as a significant financial partner in the acquisition and development of residential land and lots across the homebuilder’s markets of operation while Taylor Morrison will develop and manage the homebuilding projects.

Having executed upon the strategy, Värde and Taylor Morrison have already closed multiple projects in Texas, Georgia, Arizona and California. In the coming months, additional developments will begin in the Carolinas and Florida as the partnership continues to scale the platform.

“This relationship combines Värde’s speed and flexibility of capital, as well as our deep experience in U.S. housing, with Taylor Morrison’s trusted reputation in homebuilding and development,” said Brendan Bosman, Managing Director at Värde Partners. “The significant growth in demand for suburban housing has exposed a persistent shortfall in supply, creating substantial opportunities to invest in segments that we believe are well-positioned to outperform the broader market. We have established a strong presence across the nation and already have a substantial pipeline of deals in place.”

“Consistent with our commitment to capital efficiency and strategic growth, we believe our new relationship with Värde enhances our ability to cost-effectively acquire land, manage our portfolio and reduce long-term risk over the course of a housing cycle,” said Taylor Morrison Chairman and CEO Sheryl Palmer. “This collaboration with Värde is a meaningful evolution of our existing asset-light land strategies and is expected to help us achieve our goal of increasing our optioned land position to at least 40 percent in 2022. By remaining disciplined to our rigorous underwriting processes and strategically utilizing these and other land financing tools, we are focused on acquiring return-accretive land parcels to transform into vibrant communities.”

Värde has 28 years of experience investing in real estate, with substantial equity and credit investments in residential land development and homebuilding transactions. This partnership further expands the firm’s U.S. housing footprint in its target markets.

These land financing vehicles offer another layer of sophistication to Taylor Morrison’s existing land strategies, with more programmatic land banking for short-dated holdings and a land venture for longer-dated parcels.

About Taylor Morrison

Headquartered in Scottsdale, Arizona, Taylor Morrison is the nation’s fifth largest homebuilder and developer. 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 2016-2021, 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 annual Environmental, Social and Governance (ESG) Report.

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 $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 employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe.

For more information, please visit www.varde.com.

Värde Partners Agrees £380 Million Sale of BizSpace to Sirius Real Estate

LONDON – Värde Partners, a leading global alternative investment firm, today announced it has agreed the sale of BizSpace, a leading provider of regional flexible workspace in the UK, to Sirius Real Estate for £380 million.

With 72 locations across Great Britain offering over 4.3 million square feet of industrial, mixed-use and office space, BizSpace is home to more than 3,250 small and medium sized businesses.
Since acquiring the company in 2015 for £139 million in a debt-for-equity swap, Värde has executed a series of initiatives designed to unlock and create value, including acquiring more than 20 sites, disposing non-core assets, completing a nationwide site upgrade plan, and strengthening the management team.

Today, BizSpace is one of the country’s largest flexible workspace providers and is well-positioned to benefit from secular trends in the workspace market, with the vast majority of its portfolio in regional locations convenient for small and medium sized business owners.

“Having successfully grown and repositioned the business, we believe BizSpace is incredibly well-positioned to capitalize on the changing use of commercial real estate. As the nature of workspace use continues to shift, the company is underpinned by a proven operating platform capable of meeting the evolving needs of SMEs,” said Tony Iannazzo, Senior Managing Director at Värde Partners.

John Spencer, Chief Executive Officer of BizSpace, said: “Businesses and employees are increasingly attracted to more flexible arrangements for workspace, and are placing a greater emphasis on convenience and community. BizSpace is well placed to capture the growing demand for flexible workspace and I look forward to working with the new owners as we execute our strategic plan and deliver for our customers.”

The acquisition is expected to close in Q4 2021 and is conditional upon completion of Sirius Real Estate’s capital raise.

Lazard & Co., Limited is acting as financial adviser, Slaughter and May is acting as legal adviser and DTRE is acting as property adviser to Värde Partners in connection with the transaction.

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 employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.varde.com.

About Sirius Real Estate
Sirius is a property company listed on the main market and premium segment of the London Stock Exchange and the main board of the JSE (Ticker: SRRLF). It is a leading operator of branded business parks providing conventional space and flexible workspace in Germany. The Company’s purpose is to create and manage optimal workspaces that empower small and medium-sized businesses to grow, evolve and thrive. Sirius seeks to unlock the potential of its people, its properties, and the communities in which it operates in order to create sustainable impact, and long-term financial and social value.

About BizSpace
BizSpace is the UK’s leading provider of regional flexible workspace. For more than 20 years the Company has been providing modern, stylish workspaces with simple, affordable and flexible terms for customers across its portfolio of industrial, mixed-use and office units. By acquiring, repositioning and operating sites in convenient regional locations across the country, BizSpace is able to create value for all its stakeholders. Since 2015, BizSpace has been owned by Värde Partners, a leading global alternative investment firm, which has supported the company’s significant growth.