Wrightwood Latest Firm to Eye Discounted Investment Market, Closes $243M Fund

Adding its name to the list of firms looking to capitalize on opportunities in the down commercial property market, Wrightwood Capital has closed a $243 million fund. The company’s High Yield Partners II Fund will be invested in recapitalizations, acquisitions and selected new development projects.Wrightwood Capital’s mezzanine and equity program is available for assets with sponsor equity and provides capital structured as either a mezzanine loan or a preferred equity investment, company executives said. As the commercial real estate investment market has seen prices fall as the credit crunch and economic downturn have taken hold, many financers are looking to get in on properties at a discount. On April 8, CPN reported that BRE Properties Inc. closed a $620 million secured credit facility originated by Deutsche Bank Berkshire Mortgage for repurchase by Fannie Mae. The facility consists of two $310 million tranches. Collateral for the facility comprises 15 multi-family properties totaling 4,651 units. And on March 26, CPN reported that Liberty Property Trust snagged six secured loans totaling $317 million. Relying on industrial and office properties as collateral, the Malvern, Pa.-based REIT obtained the mortgage loans through several leading life insurance concerns. Liberty depended on industrial portfolios to back five of the mortgages, and utilized office properties to secure an additional loan. As is the case for many real estate companies these days, secured financing is the most–if not only–viable route for obtaining loans. “The market for senior unsecured debt financing has been generally unavailable to REITs during 2008,” Liberty noted in its annual report. “We anticipate that the senior unsecured debt market will be unavailable for the remainder of 2009. As a consequence, we have shifted our financing strategy to include more secured debt.” Other REITs that have recently been successful in acquiring funds via the secured loan road to pay down debt or refinance existing loans include leading distribution facility provider ProLogis, which, on behalf of the ProLogis California Fund, closed on a $120 million 10-year loan secured by industrial properties in California’s L.A. Basin and Inland Empire. And earlier in March, Colonial Properties Trust closed a $350 million credit facility secured by 19 multi-family communities, CPN reported.