Finance CMBS
Inland American Sees Opportunity in RE Debt
Aug 5, 2008
By: Dees Stribling, Midwest Correspondent

Inland American Real Estate Trust Inc., through a subsidiary, has committed to invest $100 million in Boston-based Concord Debt Holdings L.L.C., whose specialty is the acquisition of real estate securities and other real estate-related loans. The initial investment is $20 million, with as much as $80 million more over the next 18 months.

Concord Debt Holdings is a joint venture between Winthrop Realty Trust and Lexington Realty Trust. Both companies are REITs, with Boston-based Winthrop owning a variety of commercial properties, and New York-based Lexington specializing in net-leased properties.

Under the terms of the deal, contributions by Inland American will be used primarily for the origination and acquisition of debt instruments, including whole loans, B notes and mezzanine loans. According to Oak Brook, Ill.-based Inland American, dislocations in the credit markets make now a good time to invest in commercial real estate loans and other forms of debt.

Also, provided certain conditions are satisfied--including payment of Inland American’s 10 percent priority return--both Winthrop and Lexington may reduce their aggregate capital investment in the JV to $200 million through distributions of principal payments from the retirement of existing loans and bonds in Concord’s current portfolio.

Inland American is also a REIT with a diversified portfolio and part of the Inland Real Estate Group of Companies Inc. Inland Institutional Capital Partners Corp. negotiated the deal on behalf of Inland American.

 
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