Related Companies has made an investment in Ladder Capital, purchasing USD80 million of Ladder stock from certain pre-IPO shareholders of Ladder, including affiliates of TowerBrook Capital Partners and GI Partners.
In connection with the investment, Ladder has granted Related a right of first offer with respect to certain horizontal risk retention investments in which Ladder intends to retain an interest.
The investment was made by Related Real Estate Fund II, an opportunity fund, with equity commitments of over USD1 billion.
Justin Metz, managing principal of Related Fund Management, says: “Ladder’s strong and seasoned management team operates a disciplined and differentiated mortgage-focused lending platform and we believe the company is undervalued by the public marketplace. The ability to acquire a significant stake, as well as join the board, makes this investment an ideal fit for Related Fund Management and we look forward to a long-term partnership with Ladder.”
Jeff Blau, CEO of Related Companies, says: “Ladder’s core earnings have been positive each quarter since their inception and they have never had a credit loss. We saw a strategic investment opportunity because we believe that the company’s reported depreciated book value is a conservative representation of Ladder’s actual value.”
Brian Harris, Ladder’s chief executive officer, says: “We are pleased about Related’s investment in Ladder and appreciate the endorsement of our team and business model by one of the premier global real estate firms in the country. We look forward to partnering with Related and feel confident that Related’s expertise in the commercial real estate funds management business will prove helpful to our efforts in expanding Ladder’s asset management and institutional co-investment businesses.”
In conjunction with Related’s investment in Ladder, Ladder agreed to appoint Richard O’Toole, executive vice president and general counsel of Related, to replace Jonathan Bilzin, managing director of TowerBrook Capital Partners, on Ladder’s board of directors, effective as of closing.
Bilzin says: “TowerBrook has enjoyed being a part of Ladder’s creation and then watching it grow. TowerBrook continues to remain a large shareholder in the company and we look forward to watching the team and the company enjoy continued success.”
