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InvestmentsMortgageReal Estate

JLL subsidiary makes big move into commercial real estate debt

LaSalle Investment Management acquiring Latitude Management Real Estate Investors

LaSalle Investment Management, a real estate investment manager and a wholly owned subsidiary of Jones Lang LaSalle, is making a big play in the commercial real estate debt market.

LaSalle announced Monday that it entered into an agreement to make a majority acquisition of the $1.2 billion debt fund business of Latitude Management Real Estate Investors, a commercial real estate lender.

Latitude provides short-term, floating rate loans against middle-market commercial real estate assets and primarily focuses on new bridge loans for value-add and transitional properties in growth markets throughout the U.S.

Latitude has managed a series of commingled debt funds. The most recent of those is Latitude Management Real Estate Capital IV, which had a total equity raise of approximately $480 million.

The company has a substantial presence in the multifamily business, and its commercial real estate debt business will be under the JLL umbrella.

Upon the completion of the deal, Latitude’s debt business will join LaSalle’s North America private equity platform, which makes up $21 billion of the company’s total $60 billion in assets under management.

Latitude’s debt fund business will continue to be led by its current leadership, including President and CEO Glenn Sonnenberg and Executive Vice President Chip Sellers, along with Managing Directors Brett Mayer and Craig Oram.

Additionally, Latitude’s 20 employees will continue to operate under the same structure, systems and processes.

Latitude’s senior management team will also retain a minority ownership position of the company and will be actively involved in the ongoing strategy, product development and growth planning process.

“Our team has done a great job building a nationally recognized real estate debt platform over the past 18 years. While we have achieved great success independently, we see tremendous upside in joining LaSalle’s well-established global platform,” Sonnenberg said.

“LaSalle enhances the professional expertise our clients have come to expect, and possesses a similar client-focused culture that we have striven to maintain at Latitude. They are like-minded in their view of investment management, singularly focused on the pillars of client service, rigorous underwriting and delivering stable risk-adjusted returns,” Sonnenberg added. “Our entire team is enthusiastic about the capabilities and momentum associated with this partnership.”

LaSalle Americas CEO Jason Kern said that the deal works well for both parties.

“This transaction is mutually beneficial for both firms, with LaSalle gaining a market-leading capability and track record in a debt product that is highly desirable to domestic and foreign investors, and Latitude gaining access to the scale and resources a global firm like LaSalle can provide,” Kern said.

“The two companies share a similar culture and alignment of investment philosophy, fiduciary mindset and commitment to client service that has enabled them to successfully invest and grow their businesses through multiple economic cycles,” Kern continued.

“There continues to be a substantial amount of debt financing volume in the U.S. commercial real estate market. Importantly, Latitude’s lending model targets a differentiated market segment that has enabled them to grow significant share in the value-add, transitional asset space, while avoiding the risks associated with development lending or higher leverage strategies,” Kern concluded. “We look forward to welcoming our new colleagues and are excited about the growth prospects ahead.”

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