08/06/2010

Deutsche, in Switch, Eyes Deal With Ladder

Deutsche Bank, which was thinking about teaming up with Bank of America and Wells Fargo on a pooled commercial MBS offering, is going in another direction.

The bank now plans to launch a roughly $1 billion offering with Ladder Capital and perhaps another lender as soon as late September.

Market players said Deutsche is in discussions with Ladder about teaming up, and appears to be close to striking an agreement. Deutsche and Ladder declined to comment.

Ladder, a mortgage REIT founded in late 2008 by former UBS real estate chief Brian Harris, contributed $154.7 million of loans to a $716.3 million offering that J.P. Morgan led in June (J.P. Morgan Chase Commercial Mortgage Securities Trust, 2010-C1). That transaction was the second multi-borrower deal to emerge since the CMBS market seized up in mid-2008.

Deutsche apparently is on the prowl for at least one more partner as well. The bank had discussions in recent weeks with Basis Investment of New York, but that idea now appears to be dead. Basis, which declined to comment, is helmed by former CWCapital executive Tammy Heyman-Jones, with backing from JEMB Realty of New York.

It's unclear why Deutsche didn't proceed on a deal with BofA and Wells, although some market pros said Deutsche may have had a faster timetable than its prospective partners.

"I think one bank may have been ready to go, while another bank was in no big hurry, and that led to the split," said one industry player. "It's hard to coordinate that many lenders in a single deal" because of the difficulty of closing loans in the current market.

BofA and Wells still plan to conduct a joint transaction.

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