Forza Partners with Madigan to Deliver Premium Commercial Real Estate Debt Opportunities
The evolving and highly complex Commercial Real Estate (“CRE”) debt market dynamic has highlighted the need for a sophisticated offering focussed on credit quality and the interplay between risk and reward.
Forza is collaborating with Madigan, one of the best real estate debt managers in Australia, to offer the Forza Real Estate Debt Fund (“Fund”). The Fund is presently the only mechanism by which private investors can gain exposure to Madigan’s institutional grade debt opportunities.
Commercial Real Estate Debt
Investment Case
Commercial real estate debt has several key investment attributes that can make it superior to other investment opportunities.
Attractive Risk-adjusted Returns
Delivers stable performance across market cycles, especially in volatility.
Low Correlation with Real Estate Equity
Limited cap rate exposure, providing stable countercyclical returns.
Security Over Real Assets
Loans are secured by quality real estate which has a defined value.
Liquidity
Periodic natural liquidity events occur as loans mature and are paid out.
Reduced Transaction Costs
The ability to generate income returns akin to real estate ownership but without incurring the transactions costs of owning real estate assets (stamp duty, land tax).
Contracted
Returns
Investor returns are contracted and paid on a set schedule, providing stability.
Capital
Preservation
Secured CRE debt offers priority protection against valuation declines.
FORZA REAL ESTATE DEBT FUND
Access the Inaccessible
The ability to generate income returns akin to real estate ownership but without incurring the transactions costs of owning real estate assets (stamp duty, land tax).
High Conviction Strategy
Focus on small number of high conviction positions which are properly managed
Trusted Management
Highly regarded manager backed by major institutional investors
Attractive Target Return
7.50-9.50% IRR Target Return
Fund Snapshot
Near Term Optimum Fund Size / Number of Loans
$200m / approx. 10 loans
Timeframe to Near Term Optimum Fund Size
2 years
Maximum Loan size
25% of Fund size target
Long Term Fund size
$500m +
Senior loans with 45-60% loan to value (“LTV”) ratio
Maximum Loan Size
– Up to 15% of the MPRED’s portfolio may comprise mezzanine Loans with a target LTV of 65-75%.
– Construction loans, up to 80% loan to cost of construction (“LTC”) ratio.
Sector Limits
No specific sector limit
Geographic Focus
Major Australian centres (bias to Eastern seaboard)
Maximum Sponsor Exposure
25% of Fund
Loan Duration (target)
6-36 months with staggered maturities, preference for loan tenures between 12-24 months.
Contact Us
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