Principal Real Estate Investors and MUFG Union Bank, N.A. and announced that together they have formed MUFG Principal Commercial Capital, a lending platform focused on originating and securitizing loans in the Commercial Mortgage Backed Securities (CMBS) market. The platform will be co-managed by the two companies.
Both parties will source loan opportunities, participate in credit decisions and execute securitizations for the platform. MUFG Union Bank will fund all loans and retain all risk retention investments. Principal Real Estate Investors will service all loans and be retained as primary servicer post securitization, providing borrowers with an advocate in processing servicing requests.
The activities of MUFG Principal Commercial Capital will be led by Phil Miller, Managing Director and Head of CMBS activities at MUFG Union Bank, and Margie Custis, Managing Director for Principal Real Estate Investors. Miller spent more than three years leading CMBS at an Australian bank. He joined MUFG Union Bank in November 2017. Custis, a veteran of the CMBS market, has been an active industry participant as both a CMBS loan seller and investor. The two management teams previously co-managed a conduit platform at the Australian bank from 2014-2017 which originated nearly $1.8 billion in loans with no delinquencies to date and participated in nine securitizations.
“Entering the CMBS market is a key strategic initiative for MUFG Union Bank,” said Miller. “By teaming up with Principal Real Estate Investors, we gain tremendous CMBS experience and resources to complement the bank’s strong balance sheet and loan sourcing and bond distribution capabilities. We are looking forward to growing a best-in-class CMBS franchise at MUFG Union Bank.”
Miller also noted that the bank plans to expand its distribution capabilities in structured products to include CMBS through MUFG Securities Americas Inc. In 2013, MUFG’s securities business in the U.S. launched Asset-backed securities (ABS) and Collateralized loan obligations (CLOs) in structured products and recently ranked as a top ten lead bookrunner in the U.S. ABS League Tables (Thomson Reuters, May 2018).
“We are pleased to be working with MUFG Union Bank in the CMBS lending market and look forward to a very productive relationship between our two companies,” said Custis. “Principal Real Estate Investors has a strong reputation as a solutions-oriented capital provider and CMBS is an important option for us to be able to offer our borrowers. We are excited to re-enter the market and believe we provide borrowers with a unique product given our ongoing role as primary servicer.”