"We believe that the most attractive opportunities will be in originating new commercial mortgage loans," Brookfield says in its August 28 filing. The newly-formed REIT also anticipates "attractive investment opportunities" in B notes and mezzanine loans and expects to acquire large-loan or single-borrower CMBS.

For its part, Marathon plans to invest primarily in mortgage-backed securities and mortgage loans, initially in the residential sector before branching out into CMBS. In its SEC filing, Marathon notes that the RMBS market represents more than $7 trillion in assets, of which $2 trillion is non-agency RMBS. Both REITs will commence operations after fundraising is completed.

The Brookfield REIT will be externally managed by Brookfield Realty Capital Advisors, a subsidiary of Brookfield Asset Management. Its chairman is Barry Blattman, a senior managing partner at BAM. Managing the Marathon REIT will be Marathon Asset Management, which the Treasury Department selected in July as one of nine pre-qualified fund managers under PPIP.

Brookfield Realty Capital will be headquartered at BAM's Three World Financial Center here, while Marathon's offices are at One Bryant Park. The two vehicles join a growing number of REITs created to take advantage of distressed opportunities. Year-to-date, the largest IPO in this sector was the $951.5 million raised by Starwood Property Trust, which filed in June.

Instant Insights /

Brookfield, Marathon File IPOs for New REITs

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