As the real estate investment arm of Prudential Financial’s respected PGIM capital division, PGIM Real Estate Finance maintains a proven 70-year track record of arranging commercial real estate loans up to $500 million for accredited borrowers seeking capital to seize promising opportunities.
Overview of PGIM Real Estate Lending
Headquartered in Madison, New Jersey with regional loan origination offices across North America, the PGIM lending platform centralizes deep institutional knowledge from managing over $209 billion in gross real estate assets to delivering secured financing for all major product types:
Multifamily – Apartment buildings, student housing, affordable housing
Office – Central business district office towers, medical buildings
Industrial – Warehouse and distribution facilities, manufacturing plants, data centers
Retail – Shopping centers, big box stores, single-tenant properties
Hospitality – Hotels, resorts, senior living communities
Mixed Use – Live/work/play communities blending residential-commercial. Note these represent just a sampling of eligible asset classes considered for PGIM mortgages. Their extensive property expertise allows customized loans facilitating complex projects.
Benefits of Working With PGIM
Beyond the financial strength of Prudential reinforcing PGIM as a pillar in alternatives investing, sponsoring over $1 trillion in capital deployment worldwide, borrowers choose this lender specifically for unparalleled service, speed, and solutions including:
Local Market Insights – In-market originators possess hyper-focused geographical, sector, and asset intel enabling tailored execution.
Time Savings – Pre-approved term sheets accelerate eventual commitments with streamlined diligence.
Flexible Structures – Bridge, construction, perm, mezz, preferred equity and joint ventures offered.
Record-Setting Fundings – PGIM consistently structures innovative loan transactions reaching new size records through leveraging in-house servicing and syndications.
Additionally, the division maintains dedicated business channels catering specifically to refinancing scenario needs common when acquiring existing assets. This specialization allows PGIM to win complex assignment opportunities.
What are Typical Eligibility Requirements?
Dedicated real estate lending specialists at PGIM leverage macro- and micro-economic analytics alongside granular structural risk assessments to identify and mitigate exposure when underwriting. Deals routinely require:
Equity Investment – PGIM typically necessitates at least 15% to 20% equity contribution from sponsors at risk beneath their mortgages conveying commitment.
Debt Service Coverage – Minimum 1.25x or higher DSCR proves acceptable cash flows to handle payments from property operations.
Loan-to-Value – While flexible based on asset type, average LTV hovers around 65% to 75% including all secured lien positions.
Quality Locations – Assets found in robust MSAs demonstrating reliable demand drivers and appreciation over multiple cycles preferred.
Submitting proformas evidencing credible strategy and execution capabilities also weighs favorably during the review.
Loan Terms and Structures
PGIM configures financing around the distinct capital requirements underlying each project. Typical mortgage options include:
Permanent Loans – Long-term fixed-rate non-recourse structures up to 10 years.
Bridge Loans – Short term floating rate loans serving as a precursor to permanent take-outs once achieving milestones.
Preferred Equity – Flexible mezzanine funding not requiring guaranteed payoff dates yet still secured against assets.
While minimum deals start around $15 million, PGIM Real Estate Finance can accumulate capital toward jumbo transactions reaching half a billion dollars structured as sole loans or loan portions allocated across participating partners. Duration sits between 2 to 7 years normally.
Competitive pricing gets established based on prevailing Treasury yields and strong Prudential financial backing – frequently besting crowdfunding/alternative digital lenders.
5 Examples of PGIM Financed Deals
Since 2016, PGIM has deployed billions across hundreds of property financings from Boston to San Diego supporting ventures like:
1.$48 Million – Industrial Portfolio, Memphis
2.$90 Million – Life Science Campus, Philadelphia
3.$113 Million – Apartment Tower, Chicago
4.$221 Million – Office Park, LA County
5.$306 Million – Hotel & Condo Redevelopment, Miami Beach
These transactions exemplify PGIM’s capabilities tailoring loans to idiosyncrasies of strategy and geography through unmatched institutional real estate prowess.
FAQs
What additional fees are common?
Origination, servicer, and legal fee reimbursements get incorporated into funding outlay. Early repayment often incurs prepayment penalties. VISIT SITE
How long does underwriting take?
Term sheets within 2 days of preliminary diligence facilitate approvals in 30-45 days barring delays from sponsors. Timelines compress further for relationship customers.
What loan types are offered?
All core structures from permanent to bridge to preferred equity to mezzanine, alongside joint venture co-investing and structured credit get customized to needs.
What assets are ineligible?
Most commercial real estate projects qualify, but exceptions include land/ground-up development, single-tenant properties, hotels under flags, and international assets.
Is personal recourse required?
Only institutional investors gain access to non-recourse terms on mortgages while individual sponsors typically need to provide some degree of personal guarantees tied to bad boy carveout provisions.
Conclusion
With an immersive perspective into hundreds of real estate subsectors Coupled unparalleled structured products proficiency thanks to decades of alternates Portfolio management, PGIM real estate finance empowers even first-time sponsors To enact ambitious property visions through collaborative, flexible capital solutions.
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