Apollo on Track for Record $13B of Loan Originations This Year

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While some lenders are still getting their feet wet following 19 months of uncertainty, Apollo Global Management is having a record originations year, Scott Weiner, senior partner, told Commercial Observer. 

The platform completed almost $8 billion of transactions globally through the end of September and has been particularly active throughout California lately — completing several sizable deals in the market in the last several months alone. 

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Those deals include a $205 million, fixed-rate, seven-year senior loan for Ivy Station, a 244,000-square-foot creative office property in Culver City that’s leased to HBO; a $99.3 million, fixed-rate, first mortgage loan for the acquisition of The Post, a recently renovated creative office asset in Beverly Hills that’s 100 percent leased to Live Nation and the United States Postal Service; a $100 million floating-rate first mortgage loan secured by 1027 Wilshire Boulevard, a newly developed multifamily building in Downtown Los Angeles; and a $43 million loan for a 130,000-square-foot facility triple-net leased to Amazon, located at 2751 Skypark Drive in Torrance, Calif. 

“We’re having a record year,” Weiner said. “We’re part of a growing organization, and within the CRE debt space, we’re on track for around $13 billion in deployment this year, which for us would be a record.”

As for the California activity, “It’s not necessarily that we’re targeting L.A.,” Weiner said. “But as we were looking to diversify our loan portfolio, we felt underweight in California. As we looked at the market and everything going on there — on the studio and entertainment, business and tech sides — we were very comfortable transacting there.”

No stranger to the L.A. market, in December 2020 — during the depths of COVID-19 — funds managed by Apollo provided roughly $250 million in financing for Greenland USA’s THEA at Metropolis rental tower in L.A. It also provided $56.5 million in acquisition financing for EOS Investors’ purchase of the Viceroy L’Ermitage Beverly Hills. 

“We already have a big presence in L.A,” Weiner said. “Our activity there stems partly from us looking to deploy capital outside of New York and maintain diversity. It’s a very big market and thankfully we’ve found some very interesting deals to do.”

Apollo has also made changes in the composition of its lending activity this year compared with prior years. The bulk of its originations in 2021 has been in the fixed-rate, first mortgage space, whereas Apollo historically provided a lot of mezzanine financing and floating-rate debt on transitional properties. 

“One of the big areas of growth also has been our fixed-rate first mortgage business,” Weiner said. “Historically, we were doing more floating-rate debt and construction loans, which we still do, but we weren’t as active on the traditional, insurance company, long-term fixed-rate business. We really have a focus on that now, just given the need for duration in the market. This year, we’ll do around $2.5 billion of long-term, fixed-rate loans, which, again, is a record for us and something that we’ll look to continue to grow.”

Apollo’s average deal size has also increased to roughly $130 million recently, Weiner said, ranging from deals as small as $25 million to mammoth transactions of around $900 million. 

Apollo Global Management also spoke of a successful year during its investor day earlier this month. It expects its assets under management to double to roughly $1 trillion by 2026, as reported by The Wall Street Journal

Cathy Cunningham can be reached at ccunningham@commercialobserver.com.