Related Fund Management has closed $218m in debt investments, including three mezzanine loans on residential development projects in three US cities and $142m in preferred equity on a multi-family, multi-state portfolio.
The financing includes a $30m mezzanine loan to Developer Carl Dranoff on the 82-unit One Riverside condos in the Fitler Square neighborhood of Philadelphia; a $29.4m mezzanine loan to Century West Partners on a 398-unit multifamily project in the Koreatown neighborhood of Los Angeles; and a $16.5m mezzanine loan to developer Fifield Companies on the 310-unit NEXT at NoCA project in the River North area of Chicago.
“These investments represent the types of unique situations that Related’s credit platform was established to capitalize on,” said Brian Sedrish, a managing director of Related Fund Management and portfolio manager for the firm’s credit platform. “We continue to see steady deal flow and great opportunity nationwide in the high-yielding mezzanine and whole loan space.”
The $142m preferred equity investment was part of a $600m acquisition and value-add renovation of nearly 5,000 multifamily apartments in Florida, Georgia, North Carolina and Texas. The undisclosed borrower plans to reposition the portfolio with 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; four of the five 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.
“The compressed due diligence period of 30 days speaks to our platform’s ability to quickly underwrite and execute on large scale, complex transactions.”
With these latest deals the debt platform has invested about 70% of $800m is raised for debt with partner Highbridge Capital.