Mack Real Estate Credit Strategies has launched a senior transitional lending strategy, aiming to step into the gap that has been created as regional banks have scaled back activity.
MRECS – which has originated or co-originated more than $20 billion of commercial real estate loans since 2015 – plans to also originate low-leverage first mortgage loans and A-notes for other alternative lenders on an unlevered basis for commercial real estate projects in key US growth markets.
Kevin Cullinan, the firm’s co-head of credit strategies and head of originations, believes the volatility among regional banks has intensified the need for financing. “[The turmoil will] intensify unmet demand for real estate credit across the risk spectrum,” he said. “Current market dynamics create an attractive opportunity set for flexible, creative, well-capitalized and fast-moving lenders across refinancings, acquisitions and new development projects.”
In line with the new focus, the firm recently provided a $52.5 million pre-development loan for a mixed-use project in Miami and continues to analyze a robust pipeline of opportunities to serve borrowers in this space.
Priyanka Garg, also a co-head of credit strategies and the head of portfolio and asset management, said that the new strategic focus is a natural evolution of the MRECS credit platform, complementing its existing high-yield, mezzanine and leveraged lending activities.
“The key is being able to provide capital solutions to borrowers while seeking to eliminate capital markets or syndication risk,” said Garg. “In these volatile markets, we believe this is a compelling value proposition for borrowers.”