Cornerstone underwrites £124m CRE loan

The 10 year senior loan was secured against four student housing properties in the UK.

Cornerstone Real Estate Advisers has provided a £124 million ($204 million; €149 million) senior loan to UK developer UNITE Group.

The loan has a term of 10 years, with a loan-to-value ratio of 50 percent. It is secured against a portfolio of four student accommodation properties in London, Bristol, Sheffield and Coventry which together have more than 3,000 beds, according to a Cornerstone statement confirming the deal.

The loan marks the conclusion of UNITE’s refinancing programme which has seen it raise £1.1 billion in debt over the last 12 months, according to chief financial officer Joe Lister. “We have delivered on our strategy to diversify sources of funds, extend loan maturities and reduce the cost of debt,.” he said.

Cornerstone is currently attempting to build on the success of its US real estate lending platform by deploying capital in Europe. In the last quarter, it has issued £305 million of senior debt to UK-based borrowers.

Chris Bates, Cornerstone’s head of real estate finance, said in the statement: “We have developed a strong relationship with UNITE, which ensured that this significant transaction was closed within a month of agreeing terms. The transaction is another example of our proven ability to originate and execute large ticket financing opportunities with high calibre counterparties secured against quality income generating assets. We are exploring a number of other investment opportunities with similar characteristics as we continue to expand our European debt platform.”

Cornerstone chief executive Charles Weeks added: “This transaction and the continued expansion of our European lending platform complements the established debt programme that we have in the US. We look forward to expanding our debt products across the capital stack in all of our territories, with the intention of positioning Cornerstone at the forefront of the commercial real estate lending market in Europe.”