Glenn A. Sonnenberg, president of Legg Mason Real Estate Investors, tells GlobeSt.com that the new fund expects to close with $500 million in commitments by April and will invest in properties throughout the United States over the next 2 1/2 years.

"We will be diversified geographically, as well as by product type," Sonnenberg says. "We expect concentrations in California, Texas, Florida, the mid-Atlantic. We also expect to be in the Mountain states, the Midwest and New England."

The fund will provide high loan-to-value bridge loans, value-added mezzanine loans, stabilized mezzanine loans, and preferred equity. The bridge loans will offer funding up to 90% of project cost, while the value-added mezzanine loans will provide financing of up to 90% of cost to fill the gap between equity and traditional first mortgage financing for value-added deals. The stabilized mezzanine loans are intended for financing of up to 90% for stabilized properties and portfolios, while the preferred equity financing will fund up to 95% on value-added deals. The preferred equity will be senior to sponsor equity.

Legg Mason Real Estate Investors is based in Los Angeles and is an arm of Baltimore-based Legg Mason, the international financial services firm. "We expect a great deal of activity in 2003," Sonnenberg says.