Mack and Sotoloff launch real estate credit platform

The Mack family and Peter Sotoloff, formerly of Blackstone, are starting a real estate debt platform to invest in the US and Europe.

Real estate veterans Richard Mack and Peter Sotoloff (pictured) are launching a new credit venture, Mack Real Estate Credit Strategies (MRECS). The New York-based firm is reportedly targeting $750 million for their first real estate credit fund. 

Mack will head up the new company as chief executive and Sotoloff is chief investment officer, Mack Real Estate Group announced today (29 October).

A spokesperson declined to comment on the amount.

The new lending platform will focus on transitional and distressed assets throughout North America and Europe. MRECS will initially focus on mezzanine, preferred equity, and first mortgage loans on properties in need of flexible capital.

For the past year, Mack Real Estate Group, led by Richard and William Mack, has dealt in a variety of development deals for multifamily homes in the US. It was renamed last year, after the family sold AREA Property Partners to Ares Management in July 2013. 

AREA spun out from Apollo Global Management in 2000 as a dedicated real estate debt platform. Before that, William Mack, Richard’s father, was co-founder of  Apollo Real Estate Advisors business along with Leon Black, who still runs all of Apollo as chairman and chief executive. Mack Real Estate Group was launched with Mack family money.

Sotoloff, meanwhile, was previously a managing director and head of originations of Blackstone Real Estate Debt Strategies. He was one of the founders of the unit and helped build it into a $10 billion multi-strategy debt investment platform.  He left the alternative investment firm in June. 

Prior to Blackstone, Sotoloff was a principal of Tribeca Associates, where he managed the acquisition, financing and development of large-scale office, lodging, for-sale residential and mixed-use assets and portfolios. Sotoloff also oversaw non-performing loan acquisitions and global risk management strategies for the Morgan Stanley Real Estate Funds, and worked with the Goldman Sachs Whitehall funds earlier in his career.

“Private lending has a major role to play in today’s real estate debt markets.  Real estate finance has experienced seismic changes since the last financial crisis.  The landscape for borrowers is completely transformed.  Financing options for transitional assets can be limited.  As a result, we see tremendous demand for flexible, experienced lenders in that segment of the debt financing market, and limited competition,” Sotoloff said in a statement.

Mack Real Estate Group manages Mack family money, institutional capital and high-net-worth capital through direct and partnership investments in real property and related securities.  MREG specializes in domestic and international real estate investment, development and financing opportunities.