Bear Stearns is planning to complete its first European commercial mortgage-backed securitization and has created Principal Real Estate Finance Corp. (PREFCO), a new commercial loan program through which it will transact the deal and others to follow.
The transaction is expected within the next six to nine months. Nitin Bhandari, London-based managing director in the principal and real estate finance group, says he would like to build the firm's pool of loans to £300-500 million before launching a CMBS.
Bear Stearns will also underwrite large one-off loans and securitize them as a single deal, Bhandari says. He notes that Bear Stearns already has a successful commercial real estate lending program in the U.S. and aims to replicate that model in Europe.
Bhandari says Bear Stearns already has term sheets out in the U.K. market, some of which are at advanced stages. He says traditional lenders are experiencing a credit crunch, which gives Bear Stearns an opportunity.
Currently, the PREFCO team is four-strong. In addition to Bhandari, Tim Jones, Mark French and Ali Ettehadieh are associate directors. Bhandari says he will consider adding personnel depending on how the business grows.
Morgan Stanley is currently the market-leader in the European CMBS conduit arena, having completed in excess of E5 billion in deals. Deutsche Bank is about to launch its first deal through its conduit program--a £280 million deal securitizing The Charterhouse Shopping Centre Funds I & II. J.P. Morgan Securities is also planning a similar program.
