Square Mile Capital Management LLC and USAA Real Estate Company have launched a commercial real estate investment platform that will specialize in the origination and acquisition of high-quality secured real estate debt.
The sponsors, which have already begun deploying the $300 million of capital that Square Mile and USAA Real Estate have committed to the platform, expect to invest as much as $1 billion in the U.S. by the end of 2014.
The Square Mile/USAA Real Estate initiative will be headed by Jeffrey Fastov, a 30-year commercial property finance and investment banking veteran who has joined Square Mile as senior principal.
Fastov’s background includes leadership positions at Goldman Sachs, Credit Suisse and Oasis Real Estate Partners.
In a joint statement, Square Mile’s Managing Principals Craig Solomon and Jeffrey Citrin said the creation of the debt platform stems directly from the strategic alliance the two formed just over a year ago.
Square Mile will originate and invest in mezzanine loans and bridge loans as well as mortgages in which it will provide for the entire capital stack.
Square Mile’s investments will feature high quality collateral with institutional ownership and the platform expects to originate loans to be held as portfolio investments rather than serving as collateral to be securitized as CMBS.
The Square Mile/USAA initiative will utilize the more than 40 professionals located in eight Square Mile and USAA Real Estate offices throughout the U.S. .
Fastov commented, “With the ongoing recovery of the U.S. commercial real estate market, I look forward to the opportunity to invest in high quality, high yield secured real estate debt as part of a platform that benefits from Square Mile’s and USAA’s deep real estate ownership experience.
“Seasoned market players with access to substantial institutional capital are seizing that opportunity and will play a vital role in the marketplace going forward.”