CNL, Macquarie Plan $1.5B Global REIT

Orlando-based CNL Financial Group and Sydney’s Macquarie Group have joined forces for the first time to establish a new global REIT, CNL Macquarie Global Growth Trust Inc., which will pursue opportunities in just about every sector of commercial real estate in various areas around the world. The partners can afford to think big, as the proposed total offering for the REIT is $1.5 billion. Timing is everything and CNL and Macquarie believe that now–in the midst of what has essentially become a global meltdown of the real estate market–is just the right moment to lay the groundwork for a new REIT with a broad investment platform. “Like many others in the industry, we do believe that there will be some tremendous opportunities for those with capital to invest in quality properties within the next two years,” Curtis McWilliams (pictured), president & CEO of CNL Real Estate , told CPN. “That’s in the short term; in the long run, we want the ability to invest across sectors and across the globe to achieve the kind of returns we want to achieve.” CNL Macquarie Global will target office, retail, industrial, multi-family and healthcare properties for acquisition, repositioning, development and redevelopment in markets with growth potential. And those markets could be just about anywhere, but the goal is for 30 percent of the assets to be sited beyond U.S. borders. “We’re trying to be very opportunistic,” McWilliams said. “Macquarie has investment operations in all parts of the world, so we’re relying on them to identify opportunities outside the U.S. in locations where we have the best opportunity for value creation for our investors on a risk-adjusted basis.” CNL and Macquarie will manage CNL Macquarie Global jointly, and making allowances for the filing process, the partners foresee making the unlisted U.S. REIT available to investors in the second half of 2009. If all goes as planned, the REIT’s buying power down the road will be phenomenal. “We expect to use a certain amount of leverage with regard to the properties, so we will be able to acquire twice the amount if all the equity is raised.” That would be a spending purse of about $3 billion. Established 36 years ago, CNL is a privately held real estate investment and development concern that has formed or acquired companies with more than $23 billion in assets ranging from hotel and retail properties to seniors housing communities. Macquarie is a banking, financial, advisory, investment and funds management services provider. The company manages in excess of $180 billion in assets around the world.