3650 REIT (“3650”), a nationwide commercial real estate lender originating and servicing portfolio loans for relationship borrowers, today announced that it has originated a more than $103 million mezzanine loan for the recapitalization of the Southern Residential Portfolio, a 12-asset portfolio of multifamily assets spanning more than 3,500 apartment units across four states: Louisiana, South Carolina, Georgia and Tennessee. The loan, originated from 3650’s Bridge and Event Driven (BED) lending platform, carries an initial term of 24 months and is provided to a joint venture between sponsors David Werner Investments and Onyx Partners, a real estate investment firm led by Jeremy Rieder, and Carlton Associates.
“We are thrilled to complete another transaction for repeat borrowers with whom we have strong relationships, and believe the properties comprising the Southern Residential Portfolio will keep seeing great success,” said 3650 REIT Co-Founder and Managing Partner Jonathan Roth. “We built 3650 REIT for the type of moment facing today’s challenging market, and we continue to see a multitude of strategic opportunities to work with sophisticated sponsors investing in well-located assets across the U.S. This mezzanine financing is one such opportunity, and will enable the sponsors to achieve their desired financing goals by recapitalizing the existing equity structure of the diversified and historically well-occupied portfolio. We look forward to completing more transactions with the best-in-class teams at David Werner Investments, Onyx Partners and Carlton Associates in the future.”
David Werner and Jeremy Rieder agreed, noting, “We have invested in real estate transactions nationwide and with dozens of capital providers. Without exception, we find the best execution through capital providers that possess not only the technical understanding to navigate complicated transactions, but who also understand that the client relationship is at least as important as any other aspect of the transaction. Michael Fleischer and the entire team at 3650 REIT have demonstrated their commitment to this shared philosophy time after time, and we look forward to continuing our partnership with them long into the future.”
The Southern Residential portfolio comprises more than 3.7 million rentable square feet and spans a diverse unit mix of one-, two- and three-bedroom apartments with an average size of 1,020 square feet which provide best-in-market common amenities. Interior units feature modern finishes, high-end appliances and high ceilings with crown moldings, private balconies/patios, in-unit washer/dryers, walk-in closets and soaking tubs. Nearly one third of the units have been recently renovated with continuing interior renovations underway. The sponsors selected 3650 for its ability to offer a creative financing package that accommodated the tax structuring requirements of existing partners while complying with existing senior lenders loan requirements.
Senior Managing Director Drew Anderman and Vice President Eddie Haber of Meridian Capital Group arranged the mezzanine financing for the Southern Residential Portfolio. “We have had a 20-plus year relationship with the principals of 3650 REIT and the principals of David Werner Investments and Onyx Partners,” said Anderman. “3650 and the sponsors share a common belief in the importance of long-term relationships and mutually beneficial capital solutions, which makes them the perfect partners for a complicated transaction like this. We look forward to continuing to provide cutting-edge, relationship-oriented capital solutions to our clients during these volatile times in the capital markets.”
3650 has completed multiple notable loan transactions in the second quarter of 2023, most recently announcing its origination of a $58 million loan from its Stable Cash Flow lending platform to refinance Brookview Commons, a 264-unit multifamily property located in Danbury, Connecticut, as well as a $49.5 million loan from its BED lending platform to complete the construction of The Gabriel, a 288-unit multifamily property in the Huntsville, Alabama market. These successful transactions are testaments to 3650’s ability to provide surety of execution in a challenging capital market as other lenders have pulled back or have been unable to fund existing commitments. 3650’s in-house servicing platform, which currently services in excess of $13 billion in loans, relationship-based approach and strong balance sheet enable it to continue originating new loans while providing appropriate risk-adjusted returns for its equity ownership.
