By Jon Peterson
Chicago-based Heitman wants to expand its real estate debt investment platform on the West Coast. The real estate investment manager is doing this with the hiring of Richard Caterina as a senior vice president in its real estate debt group and the future opening of a West Coast regional office in Southern California.
“We want to have a larger presence on the West Coast. We are doing this with the hiring of Richard. Soon we will also be selecting a regional office in Southern California. The actual location hasn’t been selected yet,” says Greg Leadholm, senior managing director and co-head of real estate debt in North America for Heitman.
Prior to joining Heitman, Caterina was a 30-year veteran of the real estate debt industry. He served as senior vice president at Johnson Capital. This company was acquired by Walker & Dunlap in 2014. While at Johnson Capital, Caterina arranged over $1.5 billion in commercial real estate transactions, originating and placing construction, bridge, mezzanine and permanent loans and equity for clients around the country.
The overall focus for Heitman going forward is mostly with the four main property types. “I think that for the most part the focus will be on traditional property types that involve existing assets. There will be some transactions with other specialty property types like hotels, medical office buildings or self-storage, and we could be writing some construction loans,” says Caterina.
Most of the capital invested by Heitman will be with originating and structuring mezzanine and senior debt opportunities. Many of the deals will involve providing debt in the range of $50 million to $75 million. In some cases, there will be transactions that could be smaller or larger than that.
One of the targeted markets for the Heiman debt program is the overall San Francisco Bay Area. The real estate manager is now considering a debt transaction on a property in San Jose. Heitman declined to give further details at this time since it’s not a completed deal just yet.
Heitman does provide real estate debt through a variety of capital sources. Right now, it has four separate accounts with single investors and two commingled debt investment funds.
An example of the separate account is with the State of Wisconsin Investment Board. The pension fund stated in a board meeting document in March that the investor had allocated $165 million into Wilson HCF Wisconsin Holdings 5. This capital will be used to invest in the luxury hotel sector. Most of the capital will be invested in development opportunities.