BOCA RATON, Fla.--(BUSINESS WIRE)--Morning Calm Management, a vertically-integrated real estate management firm with a focus on special situation investing, today announced the formation of Morning Calm Office Finance (MCOF), a $500 million joint venture with a leading global investment manager. MCOF will provide high-quality office owners and investors with flexible financing solutions, helping them to navigate the evolving market environment.
As one of the first and only specialized, singularly-focused office credit vehicles, MCOF will help fill the massive capital void resulting from big and regional banks, life companies and debt funds pulling back on office lending. It will accomplish this by originating and acquiring structured office debt investments including senior and mezzanine loans, B-notes and preferred equity. MCOF will invest across the country’s top 30 MSAs, focusing on Class A office properties in high-barrier markets supported by strong fundamentals. Loan sizes will range from $25 to $100+ million.
“As long-time office investors, we understand the unique challenges the sector is facing and how difficult it is to secure new financing – even for the best positioned properties,” said Mukang Cho, CEO and Managing Principal at Morning Calm Management. “We decided to enter the debt business with the launch of Morning Calm Office Finance to serve as a reliable source of capital for experienced borrowers and capitalize on the opportunity created by legacy lenders pulling back. We believe this strategy provides a win-win scenario for all parties involved.”
MCOF’s market opportunity is compelling, with a projected $566 billion of office debt maturities coming due over the next five years. This wave of maturities will force borrowers to refinance, recapitalize or exit investments – all of which will likely require fresh debt capital at a time when available sources have dwindled. MCOF will leverage Morning Calm Management’s extensive relationships and experience investing equity in office buildings to source and underwrite opportunities on strong underlying assets located in reliable markets, mitigating overall sector concerns.
Over the course of his 20-year career as an advisor and principal, Cho has successfully completed hundreds of real estate transactions with an aggregate value in excess of $100 billion. Morning Calm Management currently owns approximately 10 million square feet of commercial real estate around the country, including more than 4.5 million square feet of office assets. The firm’s joint venture partner, which has more than $50 billion in assets under management, chose Morning Calm Management to execute this debt strategy due to its extensive office market experience and track record of delivering attractive risk-adjusted returns.
About Morning Calm Management
Morning Calm Management is a vertically integrated real estate management firm with a focus on special situation investing. Through its affiliates, the firm owns and manages approximately 10 million square feet of commercial real estate throughout the United States on behalf of private and institutional capital. For more information, please visit: www.morning-calm.com.