Barings US’s real estate debt team is working to think past the current market volatility as it approaches new commercial and multifamily originations.
The firm, with more than $349 billion assets under management, has a roughly $30 billion global real estate debt portfolio and a philosophy that is becoming increasingly common: finding value across capital stacks, jurisdictions and markets around the world.
“We are very global in our approach and invest across both debt and equity,” Ben Silver, co-head of US real estate, told Real Estate Capital USA.
Barings US’s real estate debt business has about $27.8 billion in assets under management, with a team of 56 dedicated investment professionals in the US. The team focuses on institutional opportunities and will finance assets across all properties and sectors, including niche areas like hotels and self-storage. Similar to many other lenders, multifamily and industrial make up a key part of the real estate group’s focus, Silver added.
“We focus on being a solutions provider for a sponsor – we don’t target one type of mortgage,” Silver said. “We want to be able to take a broad view of where we see value and where investments make sense for our clients. We provide a range of borrowing solutions from core mortgages on stabilized properties through core+ and value-add bridge loans as well as full ground-up construction if that is where we see value and can be solutions provider to borrowers.”
Affordable housing expansion
The affordable housing space is a major focus for the firm and has been for decades, said Daron Tubian, head of affordable housing investments. The firm targets loans in the $10 million to $30 million range on the affordable side compared to about $40 million to $50 million on the market-rate side.
The firm has been a consistent, long-term provider of permanent capital for affordable housing, which continues to suffer from a supply-demand imbalance.
“This national issue needs to be addressed and we’ve made that part of our overall real estate strategy,” Tubian said. “Furthermore, while the definition of workforce housing relative to affordable housing has expanded over the years, the need for consistent and long-term capital remains important in both sectors. Historically, there have not been too many lenders which have been able to commit to workforce housing in a meaningful or consistent way. But we have been here through various market cycles and have found that workforce along with affordable housing is a critical part of the real estate market and demand for such housing is only growing.”
The big picture
Barings’ goal is to be able to lend across the risk spectrum and the capital stack to best analyze the risk and return profile of different investments, said Nasir Alamgir, head of real estate debt portfolio management.
“This allows us to make the decisions on behalf of our investors and at the same time provide our best services to our customers,” Alamgir said. “One of the things we have been challenged by over the past several years is uncertainty, whether though the pandemic, geopolitical risks, or market volatility – we are trying to map and navigate that for our investors.”