LaSalle to enter U.S. real estate debt sector, acquires Latitude

LaSalle Investment Management has entered into an agreement to make a majority acquisition of the $1.2 billion debt fund business of Latitude Management Real Estate Investors (LMREI).

The transaction is subject to customary closing conditions and is expected to be completed during the first quarter of 2019.

Latitude is a U.S.-based commercial real estate lender providing short-term, floating-rate loans against middle-market commercial real estate assets owned by sponsors seeking targeted real estate solutions.

Latitude’s primary focus has been originating new bridge loans for value-add and transitional properties in sustainable growth markets throughout the United States. LMREI has managed a successful series of commingled debt funds, the most recent being Latitude Management Real Estate Capital IV (LMREC IV) with total equity raised of approximately $480 million. Latitude’s seasoned management team and vertically integrated platform has successfully closed more than $3 billion in financings across all primary commercial real estate property types. The founders of Latitude and select members of the team have worked together for 18 years, including the last nine years as LMREI and nine years within a predecessor asset management firm.

Upon closing, the Latitude debt business will join LaSalle’s North America Private Equity platform, which comprises $21 billion of the company’s total $60 billion in assets under management and is led by Americas CEO Jason Kern.

Glenn Sonnenberg, Latitude president and CEO, and executive vice president Chip Sellers, along with managing directors Brett Mayer and Craig Oram, will continue to lead the debt fund business, and LMREI’s 20 employees will continue to operate under the same structure, systems and processes, to provide continuity for all of the firm’s stakeholders. The senior management team of Latitude will retain a minority ownership position of LMREI and will be actively involved in the ongoing strategy, product development and growth planning process.

“There continues to be a substantial amount of debt financing volume in the U.S. commercial real estate market,” said Jason Kern, LaSalle Americas CEO. “Importantly, Latitude’s lending model targets a differentiated market segment that has enabled them to grow significant share in the value-add, transitional asset space, while avoiding the risks associated with development lending or higher leverage strategies. We think their debt strategy is a perfect complement to our range of real estate private equity offerings in the United States, as well as our existing European debt platform.”