Carlton Closes on $300M Deal

NEW YORK CITY-Carlton Strategic Ventures LLC, the principal transactions group of the Carlton Group, in partnership with a well-known real estate investment firm, has recently closed on approximately $300 million of discounted performing first mortgage, B-note and mezzanine positions. The confidential asset sale consisted of eight loan relationships and included office and hospitality assets.

A source close to the deal could not reveal to GlobeSt.com the identity of the investment firm, with which Carlton is co-investing, except to say that it is a hedge fund. The source also could not give details on the assets themselves.

The assets were acquired from a major financial institution–which also could not be disclosed–which sought a swift execution rather than a protracted exit under the present market conditions, Carlton explained in a statement. In each of these transactions, Carlton committed and closed quickly.

Carlton, along with its investment partner, brought in Goldman Sachs to provide the venture with non-recourse, matched-term financing for this acquisition. In addition, Carlton has recently added senior finance professional Ernie Rosato to its high yield team. Rosato was formerly a director at Merrill Lynch and several other Wall Street firms. Rosato will be a senior member of the high yield debt team and assist Carlton in its efforts to buy more than $1 billion in high yielding performing and non-performing real estate mortgage assets.

The source explains to GlobeSt.com that this $300-million closing is a follow-up to Carlton’s formation of the new $1-billion fund. Carlton Strategic Centures was added to Carlton back in October 2003 to facilitate the ability of Carlton’s clients to access sponsor equity capital that can be utilized to complete real estate acquisitions. At that time, the new group said that it intends to acquire office buildings, apartment properties, hotels, portfolios of properties and mortgages when substantial discounts to value and/or replacement cost can be achieved.