Prudential Mortgage Capital Company and Perella Weinberg Partners’ Asset Based Value strategy have formed a joint venture to originate commercial mortgages for future securitization. Prudential Mortgage Capital Company is the commercial mortgage lending business of Prudential Financial Inc. The joint venture combines Prudential Mortgage Capital Company’s strong credit culture and finance expertise with Perella Weinberg Partners’ Asset Based Value strategy’s real estate lending and principal investing experience. Loans will be originated through Prudential Mortgage Capital Company’s origination platform, then warehoused and securitized by the joint venture, and serviced by Prudential Asset Resources, one of the largest commercial/multifamily servicers in the industry.
The new venture enables Prudential Mortgage Capital Company to provide its borrowers with access to the commercial mortgage backed securities market without creating a new commercial mortgage-backed securities (CMBS) warehouse, following the divestiture of Prudential’s commercial mortgage securitization business in 2008.
The joint venture, which is structured to adapt to potential regulatory changes, is initially targeting more than $1 billion a year in fixed-rate mortgages (FRMs) for stabilized commercial properties across all asset classes. The venture will create a branded vehicle and partner with third parties to issue commercial mortgage backed securities. The joint venture is accepting applications through Prudential Mortgage Capital Company loan officers, effective immediately.
“Participation in the re-emerging CMBS market is critical to maintaining our leadership position in the commercial mortgage arena,” said David Twardock, president of Prudential Mortgage Capital Company. “This is an excellent opportunity to leverage our national origination network and expand the financing options we provide for our borrowers. We are proud of our relationship with Perella Weinberg and look forward to working with them through this joint venture to better meet our clients’ needs.”
The joint venture will be led by Richard Flohr, Sean Beggan and Jean Baker at Prudential Mortgage Capital Company, along with David Schiff, Billy Jacobs and Roger Nussenblatt of the Perella Weinberg Partners’ Asset Based Value strategy. This team brings a wealth of commercial real estate industry experience.
“Today’s announcement reflects our continued commitment to partnering with proven teams and businesses to provide specialty finance solutions to underserved capital markets," said Schiff. "This joint venture, which unites two like-minded credit cultures, will leverage each entity’s core competencies to bring additional liquidity to borrowers and high-quality securities, secured by conservative underwriting on quality assets, to bond investors.