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JLL files to launch nontraded REIT targeting commercial real estate debt
The Maryland-based perpetual REIT plans to use 60% to 80% leverage after deploying capital and limits quarterly redemptions to 5% of net asset value, with a 95% of NAV penalty for shares held under a year.
Bisnow reports that brokerage and investment firm JLL has filed with the U.S. Securities and Exchange Commission to register common shares of JLL Property Finance Trust, a nontraded REIT focused on commercial real estate debt.
The perpetual REIT, which will be based in Maryland, will target debt-backing assets across property types including multifamily, industrial, certain retail, self-storage, industrial outdoor storage, single-family rental, senior housing, life sciences, manufactured housing, mixed-use, and healthcare. It also may allocate some capital to CMBS and collateralized loan obligation investments.
According to the SEC filing summarized by Bisnow, the REIT will primarily invest in first mortgages and subordinate debt. Shares will be offered through a blind pool and issued on a continuous basis, and Redemptions are limited to 5% of net asset value per quarter, with shares held less than a year redeemed at 95% of NAV.
Bisnow adds that the debt REIT comes as loan distress rises for landlords trying to refinance into today’s higher interest rates. Trepp data cited in the article shows the CMBS special servicing rate climbed 33 basis points to 11.42% in August, with office loans in special servicing at 16.9% and large mall debt at 13.6%.