LaSalle to acquire Latitude’s debt fund business

LaSalle Investment Management has agreed to acquire Latitude‘s debt fund business. No financial terms were disclosed. The deal is expected to close during the first quarter of 2019. Berkshire Capital provided financial advice to Latitude on the transaction. Latitude is a commercial real estate lender.

PRESS RELEASE

CHICAGO, LONDON AND SINGAPORE (November 1, 2018) – LaSalle Investment Management (“LaSalle” or “the company”) today announced it has entered into an agreement to make a majority acquisition of the $1.2 billion debt fund business of Latitude Management Real Estate Investors (“Latitude” or “LMREI”). The transaction is subject to customary closing conditions and is expected to be completed during the first quarter of 2019.

Latitude is a U.S.-based commercial real estate lender providing short term, floating rate loans against middle-market commercial real estate assets owned by sponsors seeking targeted real estate solutions. Latitude’s primary focus has been originating new bridge loans for value-add and transitional properties in sustainable growth markets throughout the United States. LMREI has managed a successful series of commingled debt funds, the most recent being Latitude Management Real Estate Capital IV (“LMREC IV”) with total equity raised of approximately $480 million. Latitude’s seasoned management team and vertically integrated platform has successfully closed over $3 billion in financings across all primary commercial real estate property types. The founders of Latitude and select members of the team have worked together for 18 years, including the last nine years as LMREI and nine years within a predecessor asset management firm.

Upon closing, the Latitude debt business will join LaSalle’s North America Private Equity platform, which comprises $21 billion of the company’s total $60 billion in assets under management and is led by Americas CEO Jason Kern. Latitude President and CEO Glenn Sonnenberg and Executive Vice President Chip Sellers, along with Managing Directors Brett Mayer and Craig Oram, will continue to lead the debt fund business and LMREI’s 20 employees will continue to operate under the same structure, systems and processes, to provide continuity for all of the firm’s stakeholders. The senior management team of Latitude will retain a minority ownership position of LMREI and will be actively involved in the ongoing strategy, product development and growth planning process.

Jason Kern, LaSalle Americas CEO, said: “This transaction is mutually beneficial for both firms, with LaSalle gaining a market-leading capability and track record in a debt product that is highly desirable to domestic and foreign investors, and Latitude gaining access to the scale and resources a global firm like LaSalle can provide. The two companies share a similar culture and alignment of investment philosophy, fiduciary mindset and commitment to client service that has enabled them to successfully invest and grow their businesses through multiple economic cycles.

There continues to be a substantial amount of debt financing volume in the U.S. commercial real estate market. Importantly, Latitude’s lending model targets a differentiated market segment that has enabled them to grow significant share in the value-add, transitional asset space, while avoiding the risks associated with development lending or higher leverage strategies. We think their debt strategy is a perfect complement to our range of real estate private equity offerings in the U.S., as well as our existing European debt platform. We look forward to welcoming our new colleagues and are excited about the growth prospects ahead.”

Glenn Sonnenberg, Latitude President and CEO, added: “Our team has done a great job building a nationally recognized real estate debt platform over the past 18 years. While we have achieved great success independently, we see tremendous upside in joining LaSalle’s well-established global platform. LaSalle enhances the professional expertise our clients have come to expect, and possesses a similar client-focused culture that we have striven to maintain at Latitude. They are like-minded in their view of investment management, singularly focused on the pillars of client service, rigorous underwriting and delivering stable risk-adjusted returns. Our entire team is enthusiastic about the capabilities and momentum associated with this partnership.”

In connection with this transaction, DLA Piper acted as legal advisor to LaSalle. Berkshire Capital acted as financial advisor and Sheppard Mullin acted as legal advisor to Latitude.

About LaSalle Investment Management
LaSalle Investment Management is one of the world’s leading real estate investment managers with approximately US$60 billion of private and public equity and private debt investments under management (as of Q2 2018). LaSalle’s diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle sponsors a complete range of investment vehicles including separate accounts, open- and closed-end funds, public securities and entity-level investments. LaSalle is a wholly-owned, operationally independent subsidiary of Jones Lang LaSalle Inc. (NYSE: JLL), one of the world’s largest real estate companies. For more information please visit www.lasalle.com.
LaSalle has a well-established and growing U.K. real estate debt platform, known as LaSalle Real Estate Debt Strategy (LREDS). The third and most recent fund in the series recently closed with £804 million ($1+ billion) of commitments. In the U.S., LaSalle has executed mezzanine financing transactions in aggregate volume approaching $1 billion, but has not previously had a dedicated investment vehicle or team in the U.S. focused solely on debt origination.

About Latitude Real Estate Investors
Latitude is a national commercial real estate bridge lender providing short term, floating rate loans to middle-market commercial real estate sponsors seeking hand crafted real estate solutions. The company’s primary focus is on originating new bridge loans for value-add and transitional properties in sustainable growth markets throughout the United States. Latitude underwrites each transaction bottom-up through an equity owners’ lens making sure that interests are aligned and the exit strategy is clear. The company is actively lending on behalf of their fourth discretionary debt fund, Latitude Management Real Estate Capital IV (LMREC IV). Latitude’s seasoned management team and vertically integrated platform has successfully closed over $3 billion in transactions across all primary commercial real estate property types. The company seeks to generate favorable risk-adjusted returns for investors by targeting middle market bridge loans to experienced sponsors with business plans that generate increasing operating income through value-add capital improvements, leasing strategies, and active asset management.