NEW YORK–(BUSINESS WIRE)–ACRE, a global real estate private equity firm, today announced it has finalized a $424 million securitization of 11 multifamily mortgage loans through Freddie Mac’s Q securitization program.
Issued through ACRE’s debt fund ‘ACRE Credit I’, the floating rate, first mortgage bridge loans were secured by 11 transitional multifamily properties across Georgia, Texas, Colorado, North Carolina, and Arizona.
The Q program carries huge economic advantages for issuers, as CLO pricing has widened significantly this year. The guaranteed tranche of ACRE’s deal (Q18) sold at 87bps over SOFR. The AAA tranches of the CRE CLO market are currently around 275bps over SOFR. With Freddie Mac’s guarantee fee of ~98bps on the A-bond, the WACC on a Q deal is about half the cost of a CRE CLO. The securitization was led by JP Morgan and Barclays, with JLL Capital Markets’ Peter Rotchford, Jesse Wright, Gerard Sansosti, and Christopher Peck serving as advisors and sub-servicers for the deal.
“We were able to be nimble in an uncertain market and take advantage of our long-standing relationship with Freddie Mac to print a much more accretive securitization at half the cost,” said Daniel Jacobs, Managing Partner at ACRE. “We’re extremely grateful to both our partners, Freddie Mac and JLL, for their assistance in this transformative deal, and we look forward to working with both to continue to identify and execute new strategies to provide meaningful returns for our investors.”
The securitization represents ACRE’s first-ever ‘Q-Series’ transaction with Freddie Mac, and the latest milestone in the growth of ‘ACRE Credit I’.
Since its launch, the platform has raised $509 million of equity and has closed and committed to providing more than $2 billion in loans across 52 transactions to support the acquisition, lease-up, redevelopment, and recapitalization of multifamily assets in growing secondary markets across the U.S. such as Miami and Orlando, Florida; Durham, North Carolina; Cincinnati, Ohio; Charleston, South Carolina; and Dallas, Texas.
“The speed at which the market adjusted during late spring and early summer caught many by surprise. Helping ACRE find an alternative solution for their portfolio financing has allowed them to free up capacity and continue to originate,” Rotchford and Wright said.
ACRE’s expanding lending platform has also aided the firm in landing a growing list of institutional partners. Earlier this year, it announced a $300 million commitment from StepStone Group, a global private markets investment firm and one of the world’s largest institutional consultancies. Other high-profile global investors that have made significant commitments to ACRE’s suite of investment platforms include Hamilton Lane, OPTrust and Almanac Realty Investors, the private real estate investment arm of Neuberger Berman.
ACRE is a vertically integrated private equity firm specializing in commercial real estate through active investments in both direct equity and debt capital markets as well as special situation opportunities. ACRE manages a global portfolio in excess of $3.1 billion concentrated in U.S. multifamily with holdings in the United Kingdom and Southeast Asia through separate verticals. ACRE has offices in Atlanta, New York, and Singapore.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion in 2021, operations in over 80 countries and a global workforce more than 102,000 as of June 30, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.