Hoping to capitalize on investor interest in distressed real estate, Oaktree Capital Management and its real estate opportunities funds unloaded a bulk of their non-performing loans and other real estate in their first-ever securitization of distressed assets.
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The single class, $195 million offering, rated Baa3/BBB- by Moody's and Fitch, was backed by 700 loans and 78 properties.
Oaktree Real Estate Investments / Sabal Series 2012-LV1 is collateralized by 615 mortgage loans, 22 non-real estate loans, 49 unsecured loans, and 78 real estate owned (REO) properties. The total unpaid principle balance (UPB) of the loans and properties represented in the pool is approximately $704.6 million.
The Oaktree funds purchased the assets for $299.9 million (or 42.6% of UPB).
The properties collateralizing the portfolio consist of income producing
commercial real estate (68.3% of allocated basis for purchase), residential, commercial, and agricultural land (19.3%), residential real property (9.1%), other non-real estate assets (3.1%), and unsecured liens (0.2%).
Philip Feder, the head of Paul Hastings' global real estate practice, and Christine Spletzer, who heads the law firm's securitization practice, led Paul Hastings' efforts on the acquisition of the portfolios comprising the assets and on the capital markets offering, aided by real estate partners Robert Keane and John Cahill, and tax partners Andrew Short and Kristen Chang Winckler.
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