JPMorgan hires to step up European real estate syndication

JPMorgan has recruited Alexander Storton from rival Bank of America Merrill Lynch to beef up its European real estate debt distribution capability, Real Estate Capital  has learned.

Storton, known as ‘AJ’, has worked at BAML in real estate finance since 2010, initially as an analyst, then moving to debt distribution where he was a vice president.

At JPMorgan, Storton will join the 15-strong European real estate finance team, reporting to co-heads Giovanni Russo and Rahul Sule.

Although capital markets volatility has made distributing CRE loans via securitisation very difficult, Europe’s private syndication market has been busy and banks have been expanding their distribution teams. Dealogic put the reported syndicated volume for 2015 for CRE secured loans (excluding unsecured corporate facilities) at €33 billion which is likely to be an underestimate as not all active banks are contributing data.

According to market sources, JPMorgan sees an opportunity in the syndication market. The bank has traditionally syndicated the mezzanine pieces of large loans it has originated, keeping the senior on its book, but is believed to be planning to do more senior debt syndication in the near future.

At the end of last year JPMorgan refinanced an existing £200 million-plus bridge loan it made in 2014 on 1 Grosvenor Square, in London’s Mayfair, for the Lodha Group which acquired the former Canadian High Commission for £306 million. JPMorgan has kept the senior and placed the mezzanine once again with Apollo in the recent refinancing.

The US bank has been focusing on acquiring portfolios of performing debt as well as originating complex loans. Last June it teamed up with Lone Star to bid together successfully for a second time for a Commerzbank portfolio of loans. They won Commerzbank’s pan-European Project Parrot which comprised assets in 14 different countries including CEE and Turkey. Lone Star took the €733 million of non-performing loans and JPMorgan took performing loans with a nominal value of €1.5 billion.

The two also worked together shortly afterwards, with JPMorgan taking a circa €200 million participation in Citi and Morgan Stanley’s €1.5 billion loan-on-loan facility for Lone Star’s acquisition of Aviva’s Project Churchill. JPMorgan also acquired a sub-portfolio from Lone Star in that deal, a back to back transaction of £200 million of Churchill’s performing, long-term loans, and is said to be considering securitising them.

JPMorgan successfully sold one CMBS in the public market last year, the first post-crisis hotel deal called Mint 2015, after placing the mezzanine tranche from the same loan privately structured as Mint Mezzanine 2014.

BAML’s significant CRE debt distribution the last 12 months has included three European CMBS deals and syndication of several large hotel loans including one of £476 million for Lone Star secured on 29 Jury’s Inn hotels and another of €325 million for 10 German Interhotels.

Blackstone is a key client; last month BAML provided a €575 million loan for the private equity group’s Logicor business to refinance a portfolio of Finnish logistics properties. The majority of that debt will also be either securitised or syndicated.