Related Companies has made its first debt investment in the UK, taking a participation in the mezzanine tranche of Rocket Investments’ financing of the Atlas Building.
Rocket Investments said today saying it had sourced £240 million of senior and mezzanine development finance for Atlas, a 40-storey residential tower with 82,000 sq ft of offices and retail on City Road on the edge of the City of London.
Rocket said that Lloyds, Industrial & Commercial Bank of China (ICBC) and Bank of East Asia had provided the senior and Highbridge Principal Strategies and Urban Exposure the mezzanine.
However, Real Estate Capital can reveal that US giant Related Companies has taken part of the circa £80 million of mezz.
Related, which is developing the 17 million sq ft Hudson Yards project in New York City and this year established a joint venture in the UK with developer Argent, told Real Estate Capital in a May interview that it wanted to start lending in Europe.
The company’s expansion into high-yield debt began two years ago in the US when Brian Sedrish joined from Deutsche Bank.
The debt platform has invested more than 70% of $800 million it raised for debt, and it has an origination partnership with Highbridge.
It is thought that Urban Exposure has provided about £10m of the Atlas Building mezzanine with Related taking a minority piece of Highbridge’s circa £70m participation, at pricing to show a return in the low teens.
Rocket bought the site at pre-planning stage with cash. Apartment prices in this part of London have soared and flats are selling in the area for £1200-£1400 per sq ft.
Lloyds brought the two Asian banks into the deal.