Thorofare Capital has revealed DoubleLine Capital as the backer behind a $400m investment vehicle the firm announced in September.
The program funds floating rate, senior bridge loans — with two to three-year initial terms, loan amounts between $5m to $20m and LTVs up to 75% — for the acquisition and refinance of multifamily, retail, industrial, hospitality and office properties.
“We are hoping to originate at least $400m in whole loan bridge loans for this vehicle in the shortest time frame possible while maintaining product quality, which is the most important thing,” Kevin Miller, CEO of Thorofare Capital, told Real Estate Capital.
Thorofare, which began investing through the partnership in January, will also finance the acquisition of non-performing loans, discounted note payoffs, and note portfolios.
The investments are being made on behalf of clients whose accounts are managed under the DoubleLine Opportunistic CRE Debt Strategy, a commercial real estate portfolio that combines the direct origination of commercial loans with investments in B-piece CMBS.
Morris Chen, portfolio manager and head of DoubleLine’s CMBS/CRE team, said the partnership is allowing his firm to “take advantage of what we view as a timely market opportunity in the commercial real estate bridge loan market.”
The floating rate loans complement a series of funds through which Thorofare originates high-yield, fixed rate loans with one- to two-year terms and loan sizes between $2m and $30m. The firm is currently investing Thorofare Asset Based Lending Fund III, which raised $250m.
“We look at these as complementary products,” Miller said. “If you’re doing an opportunistic acquisition and close quickly with the high yield bucket it lets the borrower get their arms around the asset and begin to reposition it, then in six or nine months they have the optionality to transfer into the floating rate bucket to complete the business plan at a lower cost than the higher yield bucket.”
The strategic partnership is part of Thorofare’s Floating Rate Bridge strategy, which was launched in September 2014 when the firm received its first commitment of capital from DoubleLine.