Investment Opportunity
Major disruptions in commercial real estate credit markets present an historic and enduring investment opportunity to both purchase debt instruments from motivated sellers and to provide fresh capital to a re-priced and de-leveraging market. The combination of declining property values and a drastic reduction in the availability of debt capital means that owners who financed their properties at or near the peak of the market (2005-2008) will need to come up with substantial additional capital in order to refinance their loans. Many portfolio lenders are so impaired or focused on managing their current loan portfolios that they are unable or unwilling to write new loans. The scale of the problem is unprecedented and will likely dominate the industry for many years. In this market environment, investors have the opportunity to achieve equity-like returns while taking more conservative credit exposure.


Investment Strategy
The strategy is to build up, on an investment by investment basis, a diversified portfolio of debt investments that takes advantage of the re-pricing in both the debt and equity real estate markets and that has a sound “bottom up” approach to property fundamentals. We will invest principally in U.S. institutional quality income producing commercial real estate debt and debt-like instruments secured by major property types in top markets. Targeted investments will include secondary market purchases of discounted performing loans, sub-performing loans and non-performing loans focused primarily on first mortgages as well as CMBS (opportunistically). In addition, the strategy includes providing fresh capital in the form of mezzanine debt, preferred equity, B-notes and first mortgages. Abundant investment opportunities should exist in the market for these investments as a result of overhang inventory, over-structured paper, over-levered borrowers, and dislocated financing markets. Returns will be realized through a combination of interest income, borrower fees, participation in capital appreciation and realized gains on discounted note purchases.


Management Team

		Jack Taylor Managing Director and Global Head Jack Taylor is a Managing Director and head of PREI's Global High Yield Debt Group, and is responsible for leading PREI's U.S. High Yield Debt strategies as Portfolio Manager. Mr. Taylor has 24 years of experience in real estate finance and debt investing. A pioneer of the commercial real estate capital markets, he was a leader in the creation and development of the CMBS market in the 1990s. He has developed and managed third party funds, proprietary lending books, securitization programs, primary and secondary trading, investment banking, and advisory businesses. Mr. Taylor has successfully built businesses on Wall Street and in funds investing in multiple market cycles that have been characterized by strong risk management. He received a B.A. in Philosophy from the University of Illinois, a M.Sc. in International Relations from the London School of Economics and Political Science, and his J.D. from Yale Law School.
		Steven Plust Managing Director Steven Plust is a Managing Director in PREI's Global High Yield Debt Group, focused on investing in the United States. Mr. Plust has over 25 years of experience in real estate finance and capital markets. He was an active advisor to the RTC in the development and implementation of their securitization programs, with over $16 billion in advisory and underwriting assignments. Mr. Plust has worked for almost 20 years in principal investing platforms on Wall Street and in fund management, where he has been primarily responsible for transaction pricing and structuring, credit risk assessment, and analysis of complex transactions and multi-asset portfolios. He received a B.S. in Chemistry from Rensselaer Polytechnic Institute, and an M.B.A. in Finance from Columbia University.
		Stephen Alpart Managing Director Stephen Alpart is a Managing Director in PREI's Global High Yield Debt Group, focused on investing in the United States. Mr. Alpart has worked in real estate finance and debt investing for over 20 years in a variety of functions including third party funds management, proprietary on-book lending, transaction advisory business, loan syndications and loan sales, and workouts / restructurings. Areas of responsibility have included origination, underwriting, credit review, structuring, pricing, negotiation, documentation, closing, and asset and portfolio management, workouts and restructurings and sub-performing and non-performing loan sales. Mr. Alpart received his B.S. in Business Administration, Accounting and Economics from Washington University, and an M.B.A. in Finance and Real Estate from New York University.