BOISE, ID-A10 Capital, which specializes in small to middle-market mini-perm commercial mortgage loans, has completed two transactions that position it to increase lending to commercial real estate investors. An affiliate of H.I.G. Capital LLC closed an equity investment in A10 that facilitates up to $100 million additional equity capital to support loan growth, and the lender has completed a $100 million bond offering.

A10’s loans will remain on balance sheet and will continue to be serviced by A10. Moelis & Co. served as the exclusive financial advisor and placement agent to A10 in connection with the equity financing transaction.

“The equity infusion by H.I.G. affirms our business model and positions us for continued growth, while the debt offering provides us an attractive and long-term funding model,” says Jerry Dunn, CEO of A10. “We are pleased to have the support of H.I.G. to execute our strategy to be the leading mini-perm commercial real estate lender for small to middle-market properties.”

A spokesperson for A10 says what makes the firm unique is that it raised a $100 million capital fund in 2007 in anticipation of the credit crunch. “Unlike other firms, they have no legacy loans hindering them from making new loans today. Their non-recourse loans remain on their balance sheet and continue to be serviced by the lender. A leading global private-equity firm is also participating in the equity facility. Principals have significant experience operating in distressed environments dating back to the RTC in the 1980s.”

The spokesperson adds that A10 specializes in alternative funding for situations that today’s conventional lenders typically avoid, such as lower-than-market occupancy, a lease-up situation or a turnaround situation, and it prefers loan sizes ranging from $1 million to $10 million secured by real estate consisting primarily of office, retail, industrial and multifamily properties.

Dunn contends that what differentiates A10 competitively is its focus on this size of commercial-mortgage loans, its willingness to finance unstabilized properties on a non-recourse basis and the certainty of timely funding. He tells GlobeSt.com that A10 is filling a gigantic void that’s been created by the banking system.

“With the significant headwinds in the banking system and the regulatory environment forcing banks to dramatically reduce their commercial real estate exposure, we see a tremendous need for A10’s product,” says Craig Kahler, a principal at H.I.G.

H.I.G. is pleased to partner with Dunn and his team, according to Bret Wiener, a managing director at H.I.G. “The team has tremendous experience, from loan origination and underwriting through to exceptional loan servicing and is well positioned to service the needs of its borrowers.”

GlobeSt.com has reported several times in the last 16 months on A10 Capital’s growth. In December 2011, the firm hired Chuck Taylor to head up Southeast markets; in January 2011, the company hired Kyle Knox to head up Northwest markets; and in December 2010, the firm hired John Neff to head up Northern and Central California and Michael Singh to lead Southern California markets.

Instant Insights /

A10 Capital Gains $100M Equity, Completes $100M Bond Offering

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