NEW YORK CITY—A Cantor Fitzgerald subsidiary isacquiring Ranieri Real Estate Partners'distressed-loan manager, RREP Recovery Partners ManagerLLC. RREP and the investment fund it manages will nowbecome part of Cantor Real Estate L.P. and will beled by the team of founding partners Jon Vaccaroand Eric Schwartz. Deal terms were notdisclosed.

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For Cantor, the acquisition extends its reach into the middlemarket of commercial property lending, a spokeswoman told Bloombergon Thursday. Further, she said, it “opens up opportunities to bringadditional sources of capital to the business, from clients thatwouldn't otherwise be a part of the firm.”

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Howard Lutnick, Cantor Fitzgerald's chairmanand CEO, says the RREP acquisition reflects “the continued growthof our real estate and asset management businesses and investments.We are confident that RREP Recovery Partners' highly respected teamwill complement our seasoned management and strengthen our rapidlygrowing real estate investment management platform.”

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About half the $200-million RREP Recovery PartnersL.P. fund has been invested, Vaccaro told Bloomberg, withloans ranging in size from about $1 million to $20 million. Clientsof the fund include pension plans, money managers and foundations.One scenario under consideration for the future would be to form amortgage REIT.

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“Given the track record of this particular fund, one wouldexpect that we could go out and raise additional capital,” Vaccaro,who serves as RREP's CEO, told Bloomberg. “The most efficientcapital today is probably a debt-focused REIT. There's not thatmany of them in commercial real estate,” and in view of “all thereal estate-related businesses that are affiliated to Cantor, itmakes a lot of sense.”

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Ranieri Real Estate's chairman, Lewis Ranieri, notes that "Webuilt RREP Recovery Partners around the dislocation during thebanking crisis and are proud of what we were able to accomplish. Asthe business continues to grow, a transition to a larger scaleplatform like Cantor's is a natural evolution. Both Jon and Erichave been good partners and friends, and we wish them continuedsuccess.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.