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NEW YORK CITY-Carlton Advisory Services, a national real estate and loan sale investment bank, arranged a $150 million credit facility for the formation of a B-note investment fund sponsored by a major New York-based real estate investment company. The facility will be used to acquire B-note investments, mezzanine loans and other non-investment grade investments.

According to Carlton chair Howard L. Michaels, the closing marks the emergence of a new line of business for Carlton: the arrangement of credit facility capital for entrepreneurial senior and subordinate lending institutions. Carlton is currently arranging four other credit facilities for a combined total of more than $400 million of investment capital for its clients through major financial institutions.

The arrangement of the credit facility was orchestrated by Carlton after the completion of a roadshow and marketing campaign that was arranged on behalf of the fund. “The ability to present our client’s story to major lending institutions in a concise and compelling manner allowed us to obtain the best possible terms for the credit facility,” points out Michaels. “We reached out to our extensive network, worked with the client every step of the way and brought the funding to fruition.”

The facility was structured to provide attractive advance rates, an aggressive borrowing rate and an ability to write both senior and subordinate loans–features that allow the fund to be more competitive in the marketplace. The fund is taking advantage of attractive advance rates to leverage the returns in its fund and to realize significantly greater returns on capital than would have otherwise been possible, Michaels says.

Founded in 1991, Carlton has consummated in excess of $12 billion of transactions since 1998.

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