NEW YORK CITY—A Cantor Fitzgerald subsidiary is acquiring Ranieri Real Estate Partners‘ distressed-loan manager, RREP Recovery Partners Manager LLC. RREP and the investment fund it manages will now become part of Cantor Real Estate L.P. and will be led by the team of founding partners Jon Vaccaro and Eric Schwartz. Deal terms were not disclosed.
For Cantor, the acquisition extends its reach into the middle market of commercial property lending, a spokeswoman told Bloomberg on Thursday. Further, she said, it “opens up opportunities to bring additional sources of capital to the business, from clients that wouldn’t otherwise be a part of the firm.”
Howard Lutnick, Cantor Fitzgerald’s chairman and CEO, says the RREP acquisition reflects “the continued growth of our real estate and asset management businesses and investments. We are confident that RREP Recovery Partners’ highly respected team will complement our seasoned management and strengthen our rapidly growing real estate investment management platform.”
About half the $200-million RREP Recovery Partners L.P. fund has been invested, Vaccaro told Bloomberg, with loans ranging in size from about $1 million to $20 million. Clients of the fund include pension plans, money managers and foundations. One scenario under consideration for the future would be to form a mortgage REIT.
“Given the track record of this particular fund, one would expect that we could go out and raise additional capital,” Vaccaro, who serves as RREP’s CEO, told Bloomberg. “The most efficient capital today is probably a debt-focused REIT. There’s not that many of them in commercial real estate,” and in view of “all the real estate-related businesses that are affiliated to Cantor, it makes a lot of sense.”
Ranieri Real Estate’s chairman, Lewis Ranieri, notes that “We built RREP Recovery Partners around the dislocation during the banking crisis and are proud of what we were able to accomplish. As the business continues to grow, a transition to a larger scale platform like Cantor’s is a natural evolution. Both Jon and Eric have been good partners and friends, and we wish them continued success.”