3650 REIT Announces Second SASB Risk Retention Investment in a Brookfield-Sponsored Transaction

Purchase of junior classes on Allen Center in Houston follows recent acquisition of control classes on The Mall in Columbia

MIAMI--()--3650 REIT (“3650”), a nationwide private markets lender originating and managing portfolio commercial real estate (“CRE”) loans for leading institutional investors, today announced that it circled $42.5 million of junior interests in the first-mortgage loan secured by Brookfield Property Partners’ (“Brookfield”) One and Three Allen Center (the “Properties”), two Class A office towers located in Downtown Houston, Texas. This transaction follows 3650’s December investment in $23.8 million of controlling junior interests in the first mortgage backed by Brookfield Property REIT (“Brookfield”)’s The Mall in Columbia, a luxury shopping mall in Columbia, Maryland.

The junior interest investments include control classes and represent junior classes of both deals, including the horizontal risk-retention pieces. 3650 was also named special servicer on each deal, mirroring a structure common to large life insurance company loans. Brookfield agreed to annual 5 and 3 basis point fees, respectively, over the life of each loan. The fees are tied to 3650’s unique ability to maintain dedicated teams that can directly and efficiently manage Brookfield’s requests and all servicing-related functions. 3650’s in-house servicing capabilities are a key differentiator, creating a strong alignment of interests with borrowers.

“We are pleased to open a new chapter in our long relationship with Brookfield, and firmly believe in their business plan for One and Three Allen Center,” said 3650 REIT Co-Founder and Managing Partner Toby Cobb. “Our strategy of horizontal risk retention involves owning approximately 10 percent of the equity in the whole loan, which we have applied in both the One and Three Allen Center and The Mall in Columbia transactions. Acting as special servicer in accordance with a carefully crafted modified pooling and servicing agreement (PSA) provides us with control over the servicing process throughout the lifecycle of the loan, helping to provide Brookfield with a better overall experience.”

The One and Three Allen Center loan is secured by One Allen Center and Three Allen Center, as well as the complex parking facility and world-class athletic and social club amenities, comprising approximately two million square feet of mixed-use space. In 2014, Brookfield Properties embarked on a reimagining of the Property that is substantially complete. Major renovations included lobby improvements, a new skyway, health and wellness additions such as a bike room and private areas for working mothers, new elevator cabs, new air-handling units, thermally efficient glass and more. Other amenities featured in the complex include an on-site food court, the 150,000-square-foot fitness center, multiple conferencing facilities, a hotel and common green space.

Zachary Cohn, Senior Vice President, Capital Markets & Treasury at Brookfield, stated, “We are pleased with the execution by the team at 3650 on this transaction which will allow us to efficiently manage this newly renovated complex.”

About 3650 REIT

3650 (pronounced “Thirty-Six Fifty”) REIT is a nationwide commercial real estate lender originating and servicing portfolio loans for relationship borrowers. 3650 REIT’s highly differentiated lending process, national scale, vertically integrated platform and Rated Special Servicer status enable it to deliver tailored financing solutions, high-touch service and reliable, customer-focused outcomes. Co-Founders and Managing Partners Toby Cobb, Justin Kennedy and Jonathan Roth have played leading roles in the evolution of the CRE debt markets. Headquartered in Miami, Florida with offices in New York, Los Angeles, Chicago, Dallas, and Nashville. For more information, visit: www.3650REIT.com.

THIS INFORMATION DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, AN INTEREST IN ANY JURISDICTION.

Contacts

Greg Michaels, ICR for 3650 REIT
Gregory.Michaels@icrinc.com | 646-677-1836

Contacts

Greg Michaels, ICR for 3650 REIT
Gregory.Michaels@icrinc.com | 646-677-1836