Trinity Merger, Broadmark Form $1.5B Commercial Mortgage REIT
The REIT, Broadmark Realty Capital, will provide flexible real estate financing.
SEATTLE—Trinity Merger, a special purpose acquisition company, and the Broadmark real estate lending companies and management companies have entered into a definitive agreement to create an internally-managed, mortgage REIT with an expected equity value of $1.5 billion. Once formed the combined company, which will be called Broadmark Realty Capital, will provide flexible real estate financing.
“This transaction with Broadmark presents a unique opportunity to create a scalable public platform aimed at capitalizing on a niche real estate lending space where most others aren’t able to operate efficiently,” Steve Haggerty, a managing partner of Trinity Investments, says in prepared remarks.
Broadmark Realty intends to apply for listing of its securities on the New York Stock Exchange under a new ticker symbol.
Founded in 2010 and headquartered in Seattle, Broadmark provides financing to real estate investors and developers across the US, originating short term, first deed of trust mortgages. As of March 31, 2019, it had approximately $992.2 million in total committed loans and has raised $820 million through its network of real estate investors and registered investment advisors.
Under the terms of the merger agreement, Trinity will acquire Broadmark for $1.2 billion, of 92% of which, or $1.1 billion, will be in stock and 8%, or $98 million, in cash.
Jeffrey B. Pyatt, president of Pyatt Broadmark Management, LLC, will be the CEO of Broadmark Realty, and Joseph L. Schocken, founder and president of Broadmark Capital, will serve as Chairman of the board of directors. The rest of Broadmark’s executive team will continue in their respective roles in the combined company.
Trinity expects to go deeper into this space, Pyatt said, forming one or more additional private REITs, which will be organized and externally managed by a subsidiary of Broadmark Realty.
B. Riley FBR. is acting as capital markets advisor and private placement agent to Trinity, Gibson, Dunn & Crutcher is acting as Trinity’s legal advisor, and Raymond James & Associates is acting as Trinity’s financial advisor. CS Capital Advisors is acting as financial advisor to Broadmark, and Bryan Cave Leighton Paisner is acting as Broadmark’s legal advisor.