Related Companies has invested $80 million in Ladder Capital Corp.
Related said Tuesday that it made the strategic investment by purchasing Ladder stock from certain pre-IPO shareholders of Ladder, including affiliates of TowerBrook Capital Partners and GI Partners.
In connection with the investment, Ladder has granted Related a right of first offer with respect to certain horizontal risk retention investments in which Ladder intends to retain an interest. The investment was made by Related Real Estate Fund II, an opportunity fund with equity commitments of over $1 billion.
Jeff Blau, chief executive officer of Related, said, “Ladder’s core earnings have been positive each quarter since their inception and they have never had a credit loss. We saw a strategic investment opportunity because we believe that the company’s reported depreciated book value is a conservative representation of Ladder’s actual value.”
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Brian Harris, Ladder’s ceo, said Related’s expertise in the commercial real estate funds management business will help expand Ladder’s asset management and institutional co-investment businesses.
Richard O’Toole, executive vice president and general counsel of Related, will replace Jonathan Bilzin, managing director of TowerBrook Capital Partners, on Ladder’s board of directors. TowerBrook continues as a large shareholder in Ladder.
Related, a privately owned real estate firm based in New York, has a $30 billion portfolio of developments in Boston, Chicago, Los Angeles, San Francisco, south Florida, Abu Dhabi, London and Shanghai, including Time Warner Center in New York, CityPlace in West Palm Beach, Fla., and Hudson Yards under development on Manhattan’s west side. Related Fund Management is involved in real estate investments, origination and acquisition of debt and multifamily housing.
Ladder, based in New York City, is a real estate investment trust involved in commercial real estate and real estate-related assets and is also focused on senior secured assets.