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June 24, 2016  

Gallagher Leaving Macquarie to Join Prima

Industry veteran Timothy Gallagher is jumping from the sell side to the buy side.

Gallagher will leave lending shop Macquarie next week and join Prima Capital, an investment advisor in Scarsdale, N.Y.

He spent the past two years at Macquarie, where he was a managing director and co-head of the conduit business that Macquarie operates jointly with Principal Real Estate Investors. Phil Miller, a Macquarie managing director, is assuming Gallagher’s duties.

At Prima, Gallagher will report to chief executive Greg White. His exact responsibilities couldn’t be learned, but the buzz is his mandate is to help the firm expand its operations. Some are speculating that Prima, like other real estate investment shops, is maneuvering to take advantage of impending risk-retention rules that are expected to reshape the commercial MBS sector. The firm invests in CMBS, REIT bonds, mezzanine loans and high-yield whole loans.

Prima’s controlling owner is Stone Point Capital, a New York private equity shop that has been expanding its commercial real estate footprint. Stone Point acquired its interest in Prima in 2011. Last year, it took over Houston-based Situs, an advisory and servicing firm, and has been aggressively expanding that operation.

Gallagher is well known in CMBS circles, following two tours at Morgan Stanley, a stint at Goldman Sachs and a turn as chairman of the CRE Finance Council. During his first stop at Morgan Stanley, which lasted seven years, he was a director and worked on the execution of CMBS offerings and real estate CDOs. In 2005, he moved over to Goldman, where he was a managing director and co-head of the commercial mortgage origination group. In 2010, he rejoined Morgan Stanley as a managing director and head of distribution of CMBS transactions. In 2014, he jumped to Macquarie.

Macquarie and Principal said they remain committed to their conduit platform, called Principal Commercial Capital. “We are very pleased with the performance of our joint lending platform with Principal,” said Macquarie’s head of credit, Michael McLaughlin. “We have recently seen a strong uptick in our origination pipeline. We think the environment continues to be solid for the prospects of our joint arrangement.”

Gallagher has co-headed the platform with Principal managing director Margie Custis since it was established in late 2014. Macquarie funds loans and maintains the pricing model, while Principal sources and underwrites loans and manages the securitization process. Miller, who has been with the business since it launched, now becomes co-head with Custis. Before joining Macquarie in 2014, Miller spent six years at Morgan Stanley, where he was head CMBS strategist, and previously was at Merrill Lynch.

Principal Commercial securitized $819.5 million of conduit loans last year, ranking 22nd among 38 shops that contribute loans to CMBS offerings. And so far this year, Principal Commercial has securitized $153.3 million of mortgages.