Columbia Property Trust and Munich-based Allianz SE have combined forces in a $1.26B joint venture targeting U.S. commercial real estate. The move is just one breadcrumb in a trail of recent moves by insurers to compensate for reduced investment income (resulting from interest rate rises) through real-estate ventures. “Our investment in this joint venture achieved our immediate goal of acquiring premier office assets in core locations on the West Coast,” notes Allianz Real Estate of America CEO Christoph Donner. (Via Bloomberg)
Real estate developers working to finalize construction financing have struck gold in foreign, non-bank lenders — such as those from the Asia and Middle East — who are eager to lend on mezzanine and private-equity loan terms. Banks have pulled back on construction lending at this point in the cycle. “Investors have come to feel that the subordinated debt space may be a good place to go as we’ve gotten deeper into the cycle, on a relative-risk basis,” notes Trimont Real Estate Advisors CEO Brian Ward. (Via CoStar News)
In its semiannual report to Congress, the Federal Reserve has asserted that all is (relatively) well, economically speaking. Although commercial real estate investors continue to worry about a liquidity crunch, the Fed has said there is no evidence of that issue. The Fed also underscored its assessment that asset values so far are not posing a market problem. “Vulnerabilities in the U.S. financial system remained, on balance, moderate. Valuation pressures across a range of assets and several indicators of investor risk appetite have increased further…However, these developments in asset markets have not been accompanied by increased leverage,” the Federal Reserve wrote in its report. (Via Reuters)
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