(Bloomberg) -- For the lending business of real estate investment firm Square Mile Capital Management, the fourth quarter of 2021 was one for the books.
The firm issued $3.1 billion of loans across 24 deals, a quarterly record since the debt platform was founded in 2013, and nearly half of last year’s total volume of $6.4 billion.
New York-based Square Mile is riding a swell of demand for commercial-property financing as interest rates remain historically low and investors see real estate as a hedge against inflation. U.S. property investment is expected to increase by 5% to 10% in 2022 as funds look to spend down stockpiled cash, according to research by CBRE Group Inc.
Last year marked a shift in Square Mile’s strategy: Multifamily loans made up more than half of its debt business, up from about a quarter before the pandemic, according to Mike Lavipour, managing director of investments. Most were for recent developments, reflecting the demand for new rental housing. Life-science centers have been another big play, with seven transactions since Covid-19 hit, including a $155 million bridge loan on a property in Queens, New York.
At the same time, the firm dialed back its office lending, which had made up more than a third of its pre-pandemic deals. Last year, Square Mile issued only a handful of office loans as sales of the properties slowed and new development stalled, according to Lavipour.
He said expects 2022 to bring a similar amount of overall investment, with larger deals -- though fewer in number -- and more construction.
It was also a big year for acquisitions. Square Mile teamed up on separate deals with Hackman Capital Partners to buy a historic Los Angeles movie lot and New York’s Kaufman Astoria Studios.
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