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Cantor-CIM Lending Group Targets $5Bln of Originations

Friday, August 13, 2010

Investment bank Cantor Fitzgerald and investment manager CIM Group have formed a business that will originate commercial mortgages that it would sell into securitization.

The platform is targeting $5 billion of originations over the next 12 months and will close its first within 30 days, according to Anthony Orso, chief executive of the unit, Cantor Commercial Real Estate.

It will provide mortgages and mezzanine loans ranging from about $10 million to $150 million, and is targeting all property types in major markets across the country. It is expected to be particularly active in providing take-out financing for maturing debt.

"Reports are that there's $1.4 trillion of debt coming due in the next few years, which will give us the opportunity to choose loans that make the most sense," Orso said.

The program is not planning to hold the junior pieces of the debt it originates.

Orso wants to hire another 30 people for the lending program, doubling its size. The new hires would be equally split between origination and securitization operations.

CIM is positioned to fund the program's originations with institutional-investor equity.

California's Public Employees' and Teachers' Retirement systems, as well as the New Jersey Division of Investment, are among the investors in real estate funds that the Los Angeles firm manages.

Cantor, of New York, is well-established in the securitization business. It is among 18 dealers authorized to trade government securities with the Federal Reserve Bank of New York, and was among the world's largest government securities traders before the bulk of its operations was destroyed in the 2001 terrorist attacks.

The company more recently was expanding its real estate finance operations. The effort got a jump start about a year ago when Cantor added Orso, Steven Kantor, Michael Lehrman and Lawrence Britva, all former top executives for Credit Suisse's real estate operations.

Cantor plans to hire another 20 people for its real estate finance operations, in addition to Orso's hires.

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