Värde Partners Closes $602 Million in U.S. Commercial Real Estate LoansOctober 12, 2021
Firm Increases Lending to Hospitality Sector as Traditional Lenders Pull Back
MINNEAPOLIS and NEW YORK – Värde Partners, a leading global alternative investment firm, today announced it closed $602 million in U.S. commercial real estate loan originations across 11 transactions in the third quarter of 2021. In total, Värde has funded $1.7 billion of real estate loans so far this year spanning hospitality, multifamily, office, industrial and mixed-use assets.
“We continue to see significant demand for flexible financing solutions across the commercial real estate landscape, and particularly within the hospitality sector. With nearly every property in some state of transition, Värde’s commercial real estate lending program is focused on providing capital to help businesses navigate the continued impact of the pandemic and position their assets for a strong recovery,” said Jim Dunbar, Senior Managing Director at Värde Partners.
The pandemic dealt a massive shock to the hospitality sector, one of the hardest-hit markets over the last 18 months. As travel has increased, certain segments of the market have begun to see improved occupancy rates – however, the continued impact of reduced travel and the uncertainty around longer-lasting trends are perpetuating the transitional nature of these assets. Even as hotel valuations have recovered in both public and private markets, operating income is recovering at different rates across markets and by asset type.
Many hotel owners are in need of capital to refinance loans or fund their business plans, such as upgrading or repositioning assets as they emerge from the pandemic. At the same time, many lenders are finding it difficult to advance credit to this sector due to the current operating income levels. The result is an increased demand for shorter-term capital or bridge loans from alternative lenders like Värde.
Värde’s view is that the hospitality sector will ultimately recover and look more like it did pre-pandemic, with new or recently renovated full-service and luxury leisure assets being the first to recover within their individual markets. As such, Värde is focused on lending to quality sponsors with high-potential assets in top U.S. urban and leisure markets.
Third Quarter Loans
Loans closed over the quarter include:
- $84 million for the refinancing of an office property in Lewisville, Texas.
- $78 million for the refinancing of a hospitality property in Miami, Florida.
- $73 million for the refinancing of a multifamily property in Phoenix, Arizona.
- $55 million for the refinancing of a hospitality property in Scottsdale, Arizona.
- $54 million for the refinancing of a hospitality property in Bloomington, Minnesota.
- $53 million for the refinancing of a hospitality property in Nashville, Tennessee.
- $48 million for the acquisition of a hospitality property in New York City, New York.
- $48 million for the acquisition of a hospitality property in Atlanta, Georgia.
- $41 million for the acquisition of a hospitality property in Nashville, Tennessee.
- $37 million for the acquisition of an office property in Miami Beach, Florida.
- $31 million for the acquisition of an industrial property in Spring Valley, California.
Värde’s CRE Lending Program
Värde has 28 years of experience investing in real estate and credit markets and has originated over $4 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.
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 $80 billion since inception and manages $15 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.