Summary · why it matters
JLL has filed to register common shares of JLL Property Finance Trust, a new nontraded REIT focused on commercial real estate debt, with the U.S. Securities and Exchange Commission. The Maryland-based perpetual REIT will target the origination, acquisition, management and disposition of real estate debt, primarily in multifamily, industrial, certain retail, self-storage, industrial outdoor storage, single-family rental, senior housing, life sciences, manufactured housing, mixed-use and healthcare assets, with more limited investments in ground leases, net leases, cold storage, data centers and other property types, and may also allocate capital to CMBS and collateralized loan obligation investments. Shares are being offered through a blind pool on a continuous basis, and LaSalle Investment Management has an advisory agreement to operate the trust, which sits within the larger JLL parent that includes JLL Income Property Trust, its existing nontraded REIT investing in real assets. The new debt REIT expects to operate with between 60% and 80% leverage once it has substantially deployed capital, targeting loan-to-value ratios between 60% and 75% on senior, core-plus loans and up to 85% LTVs on subordinated positions, while redemptions are limited to 5% of net asset value per quarter and shares held less than a year will be redeemed at 95% of NAV. LaSalle Investment Management CEO Bradley Gries is interim CEO of the new REIT, with JLL Income Property Trust Chief Financial Officer Gregory Falk also serving as CFO. The launch comes as loan distress rises, with the CMBS special servicing rate climbing 33 basis points to 11.42% in August, its highest level since 2013, including 16.9% of office loans and 13.6% of large mall debt in special servicing, according to Trepp, as borrowers face refinancing against a 10-year Treasury yield hovering around 5%, its highest since 2007.
Jones Lang LaSalle Incorporated