Capstead and CREE Form Joint Venture
Capstead Mortgage Corp. and Crescent Real Estate Equities have entered into a $200 million joint venture to invest in commercial real estate mezzanine loans.
The two companies are forming two partnerships to target investments that will generate returns on equity of over 15%, according to the companies.
Capstead is putting up $150 million of the capital, with CREE putting up another $50 million. With the use of additional debt funding, they expect to invest over $600 million in mezzanine loans.
Andrew F. Jacobs, president and CEO, Capstead, noted that the partnership will target assets that are less sensitive to changes in interest rates.
CREE, which has an ongoing mezzanine program, will identify the opportunities and manage the loan portfolio and will earn a fee for this.
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