USAA Real Estate Co., San Antonio, Texas has made an investment in Square Mile Capital Management LLC, a New York-based firm which specializes in equity and debt investments in distressed commercial real estate loans and properties. Terms of the deal were not disclosed.
Jeffrey B. Citrin and Craig H. Solomon, the founders of Square Mile, will retain a majority interest in the company and continue to oversee its operations.
From USAA's perspective, it allows the company to diversify outside of core real estate investments.
Citrin said the deal will "open new doors and provide us with even more firepower in the marketplace, while enabling Square Mile to remain nimble and decisive in our decision-making."
Among the transactions Square Mile has been involved with over the last 18 months is the purchase of two packages of distressed CRE loans from the Federal Deposit Insurance Corp. from its receivership of Silverton Bank.
In May 2010 the firm acquired a 40% interest in a Silverton loan portfolio backed by 57 hotel properties in a structured sale joint venture with the FDIC.
The second deal, done in April 2011, was in partnership with the Blackstone Group LP for $385 million in loans secured by 45 hotels.
Square Mile is servicing the majority of the loans from this transaction on behalf of the venture. At the time the deal was announced, they were performing with all debt obligations being met by their owners.
On the equity side, in December, in conjunction with Mountain Development Corp., Square Mile bought 56 at Roseland, a four-story vacant office building located in Roseland, N.J. The previous owner was Merck & Co. Inc.
