Prudential Mortgage Capital Closes its First CRE Loan in U.K.

Prudential is targeting at least $500 million of long-term, fixed-rate senior debt transactions in Europe, initially focusing on office, logistics, multi-family and retail properties in and around large population centers such as London, Paris and major German cities.

Prudential Mortgage Capital Co. has closed a $108 million commercial real estate loan in the United Kingdom, its first financing since launching its European business less than six months ago, the company announced yesterday.

The loan is secured by a portfolio of U.K. properties comprising four multi-tenanted office properties in central London and a grocery-anchored retail property in Bath, a World Heritage Site in southwestern England with a population of about 80,000. The 11-year financing is Newark, N.J.-based Prudential’s first secured CRE debt transaction in Europe since the opening of its London advisory office in January.  No further details on the properties were immediately available.

The current market dislocation has provided the opening we have been looking for, and our plan is to be active in Europe for many years to come, said Thor Orndahl, a managing director who oversees Prudential Mortgage Capital’s non-U.S. mortgage platform.

The portfolio’s sponsor is the O&H Group, a privately owned, family-run business with more than 50 employees and net assets exceeding £600 million. Established in 1982 and headquartered in London’s Mayfair district, the company has substantial commercial and residential real estate holdings and development projects in central London and throughout the United Kingdom.

According to current data from Real Capital Analytics Inc., based on deals valued at $10 million or more, London has the world’s most active office investment market, followed by New York City, Paris, Tokyo and Seoul. Transaction volume was $18.7 billion over the past 12 months, with an average cap rate of 5.72 percent.  In terms of all CRE property types, London was a close second to New York City as the most active global market for all property types, Real Capital Analytics reported.

Prudential is targeting at least $500 million of long-term, fixed-rate senior debt transactions in Europe, initially focusing on office, logistics, multi-family and retail properties in and around large population centers such as London, Paris and major German cities.