29 Jun 2018

Principal Real Estate Investors and MUFG Union Bank form new CMBS lending platform

(Des Moines, Iowa) – Principal Real Estate Investors and MUFG Union Bank, N.A. and announced today that together they have formed MUFG Principal Commercial Capital, a lending platform focused on originating and securitizing loans in the Commercial Mortgage Backed Securities (CMBS) market. The platform will be co-managed by the two companies.

Both parties will source loan opportunities, participate in credit decisions and execute securitizations for the platform. MUFG Union Bank will fund all loans and retain all risk retention investments. Principal Real Estate Investors will service all loans and be retained as primary servicer post securitization, providing borrowers with an advocate in processing servicing requests.

The activities of MUFG Principal Commercial Capital will be led by Phil Miller, Managing Director and Head of CMBS activities at MUFG Union Bank, and Margie Custis, Managing Director for Principal Real Estate Investors. Miller spent more than three years leading CMBS at an Australian bank. He joined MUFG Union Bank in November 2017. Custis, a veteran of the CMBS market, has been an active industry participant as both a CMBS loan seller and investor. The two management teams previously co-managed a conduit platform at the Australian bank from 2014-2017 which originated nearly $1.8 billion in loans with no delinquencies to date and participated in nine securitizations.

“Entering the CMBS market is a key strategic initiative for MUFG Union Bank,” said Miller. “By teaming up with Principal Real Estate Investors, we gain tremendous CMBS experience and resources to complement the bank’s strong balance sheet and loan sourcing and bond distribution capabilities. We are looking forward to growing a best-in-class CMBS franchise at MUFG Union Bank.”

Miller also noted that the bank plans to expand its distribution capabilities in structured products to include CMBS through MUFG Securities Americas Inc. In 2013, MUFG’s securities business in the U.S. launched Asset-backed securities (ABS) and Collateralized loan obligations (CLOs) in structured products and recently ranked as a top ten lead bookrunner in the U.S. ABS League Tables (Thomson Reuters, May 2018).

“We are pleased to be working with MUFG Union Bank in the CMBS lending market and look forward to a very productive relationship between our two companies,” said Custis. “Principal Real Estate Investors has a strong reputation as a solutions-oriented capital provider and CMBS is an important option for us to be able to offer our borrowers. We are excited to re-enter the market and believe we provide borrowers with a unique product given our ongoing role as primary servicer.”

About MUFG Union Bank, N.A.

As of March 31, 2018, MUFG Union Bank, N.A. operated 355 branches, comprised primarily of retail banking branches in the West Coast states, along with commercial branches in Texas, Illinois, New York and Georgia, as well as 21 PurePoint Financial Centers and one international office. We provide a wide spectrum of corporate, commercial and retail banking and wealth management solutions to meet the needs of customers. We also offer an extensive portfolio of value-added solutions for customers, including investment banking, personal and corporate trust, global custody, transaction banking, capital markets, and other services. With assets of $120.9 billion, as of March 31, 2018, MUFG Union Bank has strong capital reserves, credit ratings and capital ratios relative to peer banks. MUFG Union Bank is a proud member of the Mitsubishi UFJ Financial Group (NYSE: MUFG), one of the world’s largest
financial organizations with total assets of approximately ¥306.9 trillion (JPY) or $2.9 trillion (USD)¹, as of March 31, 2018. The corporate headquarters (principal executive office) for MUFG Americas Holdings Corporation, which is the financial holding company, and MUFG Union Bank, is in New York City. The main banking office of MUFG Union Bank is in San Francisco, California.

MUFG Union Bank is an equal housing lender.

¹ Exchange rate of 1 USD=¥106.2 (JPY) as of March 30, 2018

About Principal Real Estate Investors

Principal Real Estate Investors manages or sub-advises $77.0 billion in commercial real estate assets.¹ The firm’s real estate capabilities cover all four quadrants encompassing public and private, equity and debt solutions. Principal Real Estate Investors, though its affiliates, was an active loan originator in CMBS 1.0, contributing almost 2,000 loans totaling more than $16 billion to more than 50 securitizations from 1999-2008. Principal Real Estate Investors is the dedicated real estate group of Principal Global Investors, a diversified asset management organization and a member of the Principal Financial Group®.

¹ As of March 31, 2018