NEW YORK CITY—Related Companies says it has closed on four multifamily and condominium debt investments totaling $217.9 million as part of Related Fund Management's credit platform.
Related Fund Management, along with its partners, recently originated a $16.5 million mezzanine loan for the ground up development of a 310-unit, class-A high-rise, multifamily project in the River North area of Chicago; a $29.4 million mezzanine loan as part of the development of a 398-unit, class-A multifamily project in the Koreatown neighborhood of Los Angeles; and a $30 million mezzanine loan as part of the development of an 82-unit luxury high-rise condominium project expected to commence shortly in the Fitler Square neighborhood of Philadelphia.
Brian Sedrish, a managing director of Related Fund Management and portfolio manager for the firm's credit platform said, “We were pleased to work with four very established sponsors and provide creative financial solutions for these distinct opportunities. These investments represent the types of unique situations that Related's credit platform was established to capitalize on. We continue to see steady deal flow and great opportunity nationwide in the high-yielding mezzanine and whole loan space.”
The firm also made a $142 million preferred equity investment as part of a $600 million acquisition and value-add renovation of nearly 5,000 multifamily apartments in gateway cities in Florida, Georgia, North Carolina and Texas. The borrower has successfully executed on value-add investment strategies on over 30,000 multifamily units and plans to invest significant capital to reposition the portfolio, which will consist of extensive interior, exterior and amenity space upgrades.
“This transaction provided our platform the opportunity to make an investment in existing, cash-flowing assets in growing markets with strong multifamily fundamentals; 4 of the 5 markets ranked in the top 15 markets nationwide for effective rent growth in 2014,” said Patrick Martin, a senior vice president with Related Fund Management. “Additionally, the compressed due diligence period of 30 days speaks to our platform's ability to quickly underwrite and execute on large scale, complex transactions.”
Related Fund Management's real estate credit platform is investing capital in real estate debt and preferred equity, focusing on real estate projects in transition such as value add renovation, re-development, conversion and new construction as well as infill land deals. Target investments are being sourced across the United States and include distressed debt, high leverage mortgage loans, mezzanine loans and preferred equity positions in gateway cities including New York, Boston, Chicago, Washington D.C., Los Angeles, San Francisco and Miami, secondary markets that demonstrate strong supply/demand imbalances and select markets in Europe. Related Companies, based in New York, is one of the most prominent privately-owned real estate firms in the United States.
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David Phillips
David Phillips is a Chicago-based freelance writer and consultant with more than 20 years experience in business and community news. He also has extensive reporting experience in the food manufacturing industry for national trade publications.
