LaSalle to target €1bn for fourth flagship property debt fund – exclusive

The investment manager’s latest fundraising drive follows the closing of €200m of loans to Blackstone from its third mezzanine debt fund.

Real estate investment manager LaSalle Investment Management is aiming to raise €1 billion of capital for a fourth mezzanine lending vehicle in its European property debt fund programme, Real Estate Capital has learned.

If the firm hits its fundraising target for LaSalle Real Estate Debt Strategies IV it will be the largest fund yet in the series. LaSalle said the target reflects high investor demand for real estate debt. It will also be the first vehicle in the series to be euro-denominated, reflecting growing demand from continental European investors and LaSalle’s increasing focus on continental European lending deals. Its predecessor, LREDS III, which is close to being fully deployed, closed on £804 million (€896 million) in 2017.

Real Estate Capital understands that LaSalle will target a return of 8-11 percent for LREDS IV. A first close is targeted for Q1 2020.

LaSalle’s decision to raise fresh capital for the LREDS series came as it closed three large mezzanine loans for US private equity giant Blackstone, through LREDS III. In total, LaSalle provided €200 million, to refinance three portfolios of last mile logistics and industrial assets. The portfolios include 264 properties, located in urban locations in Germany, the Netherlands, France and Denmark, which form part of Blackstone’s European last mile logistics platform, Mileway.

“These three mezzanine loans follow on from two previous financings of the same strategy that we have done for Blackstone in 2018 in the UK, Germany and Netherlands,” said Ali Imraan, managing director, debt investments and special situations at LaSalle.

Following the deals, LREDS III is ahead of its deployment schedule, with more than £360 million of loans committed so far in 2019, LaSalle confirmed.

In addition to its LREDS series, LaSalle also lends in Europe through its €1 billion LaSalle Residential Finance series, through which it lends against construction projects in the residential, hotel, student housing and healthcare sectors. In December 2018, it also held a final close of its LaSalle Whole Loan Strategies programme on €600 million, through which it originates and holds loans of up to 80 percent loan-to-value.

LaSalle’s European real estate lending strategy is led by head of debt investments and special situations, Amy Aznar.