Within six weeks of launching a new $170 million first-position real estate lending vehicle, a joint venture between Spruce Capital Partners and Tall Pines Capital has originated more than $85 million in loans to 40 projects, predominately in Brooklyn and Manhattan.
The principals credit strong borrower relationships, plenty of available capital and a “lightning speed” ability to close loans within the largely unaddressed market of smaller and medium-sized developers in making it one of the most active lenders in the market.
“Emerging developers in hot neighborhoods have the local expertise to identify and set-up very rewarding deals but they need access to capital – which they often need on a near-immediate basis,” said S3 principal, Robert Schwartz.
“Traditional lenders are not interested in lending on these deals and most other funds cannot perform due diligence as quickly as we can and often they do not have ready cash.”
Already more than 40 percent deployed, S3, expects sustained word of mouth among its clientele to continue to generate loans and build momentum for the fund.
“Our deal flow has been incredibly robust as a result of funding our first few loans with talented developers in just a few days,” says S3 principal Joshua Crane.
“The development community is tight-knit and information-efficient: when someone starts a deal the details get transmitted to the rest of the market and very quickly we were acknowledged to be an effective player.”
“Tall Pines’ mission is to connect with those who leverage their expertise into opportunities that might not be apparent to conventional enterprises,” says Emanuel Stern, who co-founded Tall Pines earlier this year with Bradley Settleman and also is vice chairman of Hartz Mountain Industries.
“When we met Robert and Joshua and heard about their plans to create a highly scalable platform to partner with local investors and developers, we knew they had a winner.”