1. Strong Performance History
As of December 31, 2021, our annualized net dividend to investors has averaged 12.25% since the Fund’s inception in 2011 with a trailing three-year average of 10.10%. We have also originated 135 loans totaling $1.127+ billion with $646+ million of payoffs across 108 investments as of December 31, 2021.
2. Exposure to an Underserved Market Niche
We focus on providing a wide range of short-term financing options for distressed and opportunistic middle market real estate investment scenarios – an underserved niche in the capital markets. With terms ranging from 6 to 30 months and an interest rate floor of 8.75%, our capital solutions include construction, bridge, and mezzanine financing as well as preferred equity investments, opportunistic debt purchases, partnership buyouts, and other structures curated to fit our clients’ needs. We benefit from enhanced flexibility and agility as a non-bank lender, enabling us to navigate complex capital configurations, achieve accelerated closings, and overcome unique challenges.
3. Community-Focused Investment Strategy
Investing in underserved urban communities with significant growth potential is a key component of our investment strategy. We seek attractive investment opportunities in communities that benefit from positive demographic trends, collaborative local governments, and the availability of public incentives but that often lack conventional financing partners. These investments enable us to create jobs and improve local neighborhoods while also delivering attractive returns to our investors.
4. Experience Leveraging Creative Financial Structures
Our experience in opportunistic and distressed real estate is significantly augmented by our expertise in leveraging creative capital structures to enhance investment returns. We have been active investors in historical rehabilitation projects, redevelopment zones, and a wide range of projects in pro-development communities that leverage subsidies, grants, public financing vehicles, and private capital to ensure deal execution. Our experience spans RACP grants, Historic Tax Credits, Rehabilitation Credits (Historic Preservation), New Market Tax Credits, Commercial PACE financing, PILOT Agreements, SBA financing, and other grant programs.
5. Unique Deal Flow
We benefit from a unique deal pipeline, which is typically sourced directly from the diverse network that we have cultivated in our 40 years’ experience in the Northeast real estate market. Our network of bank executives, private equity firms, developers, contractors, and other professionals frequently introduces us to exclusive investment opportunities that are not widely marketed to our competitors. Moreover, our reputation for flexibility, efficiency, and reliability has fostered a repeat clientele and steady flow of referrals that have greatly enhanced the quality of our investment opportunities.
6. High-Touch Asset Management
A hands-on approach to managing assets from origination through disposition is a core component of our investment strategy and significant contributor to our strong investment track record. At least two members of our management team complete a site visit, meet the project team, and vet key third-party professionals prior to closing, and we conduct recurring visits on a monthly basis to ensure key milestones are achieved. We maintain constant communication with our clients to ensure challenges are overcome.
7. Unrivaled Local Expertise
We are as local as local gets! We target investment opportunities located within 100 miles of NYC, and our team is mostly comprised of lifelong residents of New York and New Jersey who are intimately familiar with the region that we serve. We believe strongly in the importance of proximity to our investments, which affords us the opportunity to conduct frequent site visits, leverage our vast network of contractors and real estate professionals, nimbly resolve problems as they arise in real time, and generally capitalize on our strong familiarity with the investment areas that we serve.
8. Extensive Network of Professionals
We have been in the real estate business for over 40 years, funded over $3 billion to clients, completed hundreds of successful projects, won numerous distinguished awards, and developed strong relationships throughout the tri-state area. Our third-party professionals – lawyers, appraisers, construction consultants, developers, contractors, insurance brokers, and other specialty consultants – are among the best in the business, having been vetted and compiled over multiple decades in the industry.
9. Complete Transparency
We pride ourselves on transparency to our investors, financial partners, and clients. The Fund distributes quarterly reports detailing our performance, portfolio composition, and investment outlook. A certified audit is completed annually by a highly regarded, third-party accounting firm, CohnReznick. Our investors are invited to participate in the Fund Manager’s portfolio review meetings, which are conducted weekly to discussing investment updates, prospective deals, and portfolio strategy.
10. Tax Advantaged Fund Structure
In 2019, we determined the Fund could capitalize on a tax deduction for Real Estate Investment Trusts pursuant to the 2017 Tax Cuts and Jobs Act and created a subsidiary REIT corporation. As a result, all investment operations are primarily conducted by the REIT, generating pass-through income via ordinary REIT dividends to the Fund. Investors thereby benefit from the tax deduction for qualifying income and enjoy a lower tax rate.