South Korea’s Public Officials Benefit Association is investing $100 million in a shorter-term lending strategy with US commercial real estate lender 3650 REIT, affiliate title PERE has learned.
The investor has committed $100 million to a fully discretionary separately managed account investing in 3650’s Bridge and Event-Driven (BED) lending strategy, according to Jonathan Roth, co-founder and managing partner at 3650 REIT. BED focuses on shorter-term loans for borrowers pursuing ground-up construction, acquisitions, repositioning, recapitalization, or the restructuring of partnerships. For the strategy, the firm is currently managing $2 billion of capital from its separately managed accounts and commingled funds.
“3650 is an ideal partner for POBA as we continue to seek international relationships with leading alternative assets firms in the US and worldwide,” said Harry Song, head of overseas real estate for POBA. “The firm’s ability to utilize its lending experience and expertise through multiple real estate market cycles to deploy capital, even amid today’s sector-specific and economic challenges, make it an attractive option to generate appealing, risk-adjusted returns for our fund members. We look forward to building upon our relationship with 3650 well into the future.”
As PERE previously reported, Song believes 2023 and 2024 are good years to invest in real estate. Along with real estate investment trusts and commercial mortgage-backed securities, POBA has been focusing on real estate debt opportunities arising from refinancing needs for 2023.
Roth told PERE that the relationship with POBA started with and introduction made by POBA’s investment partner and US pension fund The California State Teachers’ Retirement System. He noted some of the biggest institutional investors including CalSTRS and Mubadala Investment Company are investors with 3650. Both CalSTRS and Mubadala have invested in all of 3650’s lending products and strategies.
Roth hopes the separately managed account will be the start of a long-term relationship with the Korean investor. “As fund allocators seek reliable havens for their capital in the US, 3650’s high-touch, hands-on, property-level approach remains attractive for those looking to make longer-term investments backed by sponsors with well-located, relevant assets.”
Founded in 2018, 3650 currently has $5.2 billion in loans originated across its lending platform and services more than $16 billion in debt from its rated servicing platform. Apart from BED, the firm also has a stable cashflow lending platform, a transitional lending platform, and a special situations investment strategy. These strategies allow the firm to provide borrowers with flexible loan structures for cash-flowing or newly constructed projects with clear paths to stabilization.