Brookland launches mezz RE lender

The real estate-focused investment bank has launched its mezzanine and whole loan lending platform with support from shareholder, Omni Partners.

Brookland Partners has established a new mezzanine and whole loan debt unit, European Real Estate Capital (E-REC). The lender has executed its first deal with seed capital from a private fund related to Omni Partners, which owns a 40 percent stake in Brookland. 

E-REC backed LRC UK’s £31 million ($48 million; €42 million) purchase of City Square in Liverpool. The five-year fixed rate mezzanine deal carried a loan-to-value ratio of just over 72 percent. E-REC sold down the senior piece, while the junior slice is held by Omni’s private fund. 

The building is around 78 percent occupied by government-related agencies including the Home Office – the Liverpool Civil and Family Court is housed in the building while quango MyCSP, which administers the Principal Civil Service Pension Scheme, also has its offices in the building. 

LRC UK is an existing client of Brookland, although the financing was its first loan to the real estate investor, said Nassar Hussain, managing partner of Brookland Partners. 

E-REC will make loans of up to 80 percent LTV and is seeking net IRRs of 9-10 percent. The lender will take second lien charges over real estate assets as well as taking security over equity shares. 

Omni Partners is providing the new venture with seed capital from a private fund. E-REC plans to build a track-record of deals before approaching third party investors to raise its own fund sometime in the first half of next year, Hussain said. 

The lender has a pipeline of mezzanine and whole loans across three European jurisdictions worth more than €150 million, he added. 

“With the launch of E-REC, Brookland has expanded its platform to offer fully-integrated commercial real estate debt solutions. E-REC leverages Brookland’s significant experience and expertise in origination, underwriting, structuring and management of real estate debt, while upholding Brookland’s strong reputation for delivery and execution,” said Hussain. 

Omni Partners, which manages a number of funds including Omni Secured Lending Fund II, acquired a 40 percent stake in Brookland last year. 

“The launch of the E-REC lending programme is one piece of evidence among many that our partnership with Brookland has been successful. Omni has already reaped meaningful benefits from Brookland’s expertise and proven ability as an innovator,” said Omni Partners’ founder and head of risk, Steve Clark. 

Omni’s residential lending subsidiary, Amicus Finance, recently completed the first securitisation consisting entirely of short-term UK bridging loans. Brookland co-arranged the securitisation. 

Omni Partners is based in London and has an office in Irvine, California. The firm manages around $858 million in assets. 

Independent real estate investment banking firm Brookland Partners sources and structures investment opportunities, advises on capital raising as well as working on restructuring. It is now working on a real estate debt fund platform in partnership with Omni.