Pan-European commercial real estate lending platform Starz Real Estate has secured an additional investment from StepStone Real Estate (SRE), the real estate arm of private markets investment firm StepStone Group.
The investment is destined for the Starz fund, Starz Zenith Capital, which originates middle market commercial loans between €15 mln and €100 mln.
David Arzi, CEO of Starz, said:'We are pleased to continue our partnership with StepStone, providing additional institutional capital that will support those looking at new opportunities brought on by the current economic climate, whether acquisitions or revitalising assets to suit shifting occupier or usage demands.
'Despite the headwinds, it has been an incredibly busy year for Starz, and we look forward to continued growth into 2023 and beyond, supported by our partners that share our vision.'
SRE’s initial investment will enable the fund to originate an additional €250 mln in loans. This builds on the anchor investment from Abu Dhabi’s sovereign investor Mubadala Investment Company and Starz.
The fund has already originated over €300 mln in loans since launching in December last year, with the new investment taking the fund’s potential lending capacity to over €1bn.
The Guernsey-regulated fund offers loans for acquisition and recapitalisation of high quality, value add commercial real estate assets across the eurozone and United Kingdom.
This is SRE’s second investment with Starz. It previously anchored Starz’ first fund, Starz European Loan Fund I, with a €125 mln commitment.
Michael Campbell, head of real estate investments at Mubadala, said: 'While the current economic environment has made us far more selective regarding the real estate investments that we pursue, we continue to have strong conviction regarding opportunities in real estate credit specifically, and welcome SRE as a partner.'
Josh Cleveland, who heads the EMEA region for SRE said: 'We believe that the high interest rate environment, combined with increasing liquidity constraints that are starting to emerge, will create substantial opportunities to deliver attractive risk-adjusted returns to our investors in the private debt sector in this next market cycle phase.
'Our previous experiences investing with Starz led us to select them as a best-in-class partner to increase our commitment to Europe’s private debt sector.'