Singapore wealth fund Temasek and real asset manager CenterSquare Investment Management have formed a co-investment vehicle to deploy up to $200 million into high-quality subordinate real estate loans.
The venture, which continues CenterSquare’s Debt Fund Series strategy dating back to 1999, will focus on mezzanine loans and debt-like preferred equity investments secured mainly by income-producing rental properties, per the announcement.
The initial tranche of capital will co-invest with CenterSquare’s latest debt fund in largely pre-identified transactions, primarily targeting multifamily assets. The strategy retains the flexibility to adapt to shifting market conditions, aligning with previous funds in the series.
CenterSquare Investment Management sees a growing need for “gap capital” among borrowers as higher interest rates reduce the availability of mortgage loan proceeds, according to Michael Boxer, Managing Director of the firm’s Private Real Estate Debt vertical.
“We believe this creates an excellent opportunity for disciplined investors to earn attractive all-in returns, and we’re excited to expand our relationship with the highly respected Temasek investment team,” Boxer added.
Temasek began its partnership with CenterSquare in early 2022. The new vehicle marks an expansion of their collaboration, allowing the two firms to provide what they describe as creative financial solutions to borrowers.
Richard Gorsky, managing director of Private Real Estate Debt at CenterSquare, said current conditions offer “one of the best times” in his career to invest in commercial real estate debt.
“The convergence of several factors, including the reconstitution of the borrower’s capital stack and resetting valuations, combined with the favorable fundamentals across residential subsectors underpin this timely co-investment opportunity,” he said.
Founded in 1987, CenterSquare is an independent, employee-owned real asset manager with more than $14 billion in assets under management as of December 2024. The firm has offices in suburban Philadelphia, New York, Los Angeles, London, and Singapore.
