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CHATHAM, NJ-Cronheim Mortgage recently closed on the acquisition of a $103.5-million loan backed by three single-tenant net-leased properties in Las Vegas, Memphis and Columbus, IN. The transaction was structured as a pari-passu partnership with locally based Cronheim’s correspondent investors that include American National, National Western Life Insurance Co. and the Westcap Corp. of Delaware.

The seller was KeyBank National Association, which originated the debt in 2007 for affiliated entities of Lexington Realty Trust. Cronheim CEO Andrew Stewart tells GlobeSt.com that the firm started working on the deal in February, when it originally sought to complete the transaction with one investor. Eventually, more investors were brought in to complete the acquisition.

He said the note was sold at a discount, but declined to specify the percentage. “It was a seven-year loan that KeyBank intended to securitize,” Stewart says. “That never happened, so they decided a whole loan sale would get a better execution.” He adds that the loan is performing and not in distress. “KeyBank was looking to raise capital,” he says.

According to a statement, Cronheim choose to assemble the loan purchase as a participation given its long-standing relationship with all of the buyers. “We expect to utilize this group to finance additional projects in an environment where larger transactions are difficult to accomplish,” says Dev Morris, principal of Cronheim.The company is also in the process of creating a fund vehicle to supply capital for additional loan purchases as well as new originations.

Included in the deal are the 282,000-square corporate headquarters of NV Energy in Las Vegas; a 521,286-square-foot, four-building campus occupied by FedEx in Memphis; and energy company Cummins Inc.’s 390,100-square-foot building in Columbus, IN.

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