Many traditional lenders have backed off commercial real estate in today’s pricey borrowing environment, but some private lenders, like Pender Capital, see the price of debt as an opportunity to fill the gap.
The Dallas-based investment manager provided $31 million in financing to two apartment complexes in Dallas-Fort Worth.
Pender lent $18 million to a Class A building located 37 miles north of downtown Dallas. The property’s 324 units are 96 percent occupied. The loan represents a 50 percent LTV against the discounted price of the property.
Pender also provided $13 million to a 194-unit apartment located 12 miles north of downtown Dallas. The loan will support the purchase of the property and provide funding for owners to make improvements to the building.
The firm did not disclose the locations of the properties or the borrowers.
“A ‘wall of maturities’ is set to hit the CRE sector. While this may present challenges for traditional bank lenders, it is a massive opportunity for private lenders,” said Pender CEO Cory Johnson.
Pender is currently focused on opportunities in the Sunbelt and southeast to invest in multifamily, self-storage, and industrial properties, he added. The firm typically provides short-term debt in 12-month terms with optional extensions.
Other older properties purchased as value-add investments haven’t been as lucky as the recipient of the $13 million loan.
Properties in similar positions are going back to lenders or being sold at a discount. That’s because rate caps are expiring amid higher interest rates and renovation costs as well as a decline in property values.
Pender Capital is an investment manager that focuses on commercial real estate. The firm has originated more than $1 billion in commercial real estate credit.
The firm has provided fresh financing for five other multifamily and mixed-use properties in DFW, according to Pender’s website. The loans range in value from $4 million to $9 million.
