MUFG Union Bank, N.A and Principal Real Estate Investors have created MUFG Principal Commercial Capital, a lending platform, which they will both co-manage.

The new entity is dedicated to originating and securitizing loans in the Commercial Mortgage Backed Securities (CMBS) market. Both firms will be involved in sourcing loan opportunities, credit decisions and implement securitizations for the platform.

“Entering the CMBS market is a key strategic initiative for MUFG Union Bank,” said Phil Miller, managing director and head of CMBS activities at MUFG Union Bank. “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.”

Principal Real Estate Investors will service all loans and will be retained as primary servicer post securitization and helping out borrowers in processing servicing requests. MUFG Union Bank will fund all loans and retain all risk retention investments.

“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,” Margie Custis, managing director for Principal Real Estate Investors, said. “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.”

Miller and Custis will spearhead the activities of MUFG Principal Commercial Capital.