T30 Capital and Blueprint Capital Advisors have formed a partnership through which they will originate mid-market senior bridge and construction loans on behalf of experienced and emerging minority- and women-owned commercial real estate owners in the Northeastern US.
The partnership will focus on opportunities in the multifamily, mixed-use, hotel, and industrial sectors, offering loans of $5 million to $50 million with loan-to-value ratios of about 70-75 percent and durations of 12-24 months.
Blueprint and T30 hope to expand their lending pipeline from $750 million to $2.5 billion, working in a part of the commercial real estate finance market that is underserved in two ways.
First, mid-market opportunities often fall under the radar of larger traditional and alternative lenders. And second, experienced and emerging women- and minority-owned commercial real estate businesses have historically had a difficult time securing financing to expand their platforms.
“We want to extend an opportunity to women, developers and sponsors that have heretofore been underbanked,” said Jacob Walthour Jr, CEO of Newark, New Jersey-based Blueprint, a $1.4 billion registered investment adviser. “It has been very difficult for these businesses to have credit extended to them, in part because there is a perceived level of risk that lenders are not comfortable taking.”
Margaret Grossman, managing partner and president of T30, explained the partnership is seeking opportunities where the New York-based real estate investment company can leverage its expertise as an operator and sponsor.
“We’re not just looking at the credit metrics on a spreadsheet, we really have the ability to evaluate a borrower’s business plan. We have been in those shoes, we have done the kind of projects we are financing,” Grossman said.
The partners will work with brokers and other intermediaries to build the platform, with an eye toward building relationships with borrowers who will be repeat lending clients.
“We have committed to an open-door sourcing policy, working our networks to identify MWBE sponsors, emerging sponsors who aren’t already on the radar of mortgage brokers and directing out lending there,” Grossman said. “We don’t have to have a borrower with a long track record – we can evaluate what they’re doing and bring the capital to them.”
The partnership is not afraid of working through more complex scenarios. T30 owns about 100 properties in the venture’s target markets and its property management business manages another 3,000 units in the area.
“On the equity side, we are managing our own assets and it is the same on the debt side. We are sourcing directly through relationships that we have established in the market in which we are present in,” Grossman said. “We are doing the whole process from the sourcing to the underwriting to loan services and debt management in-house, with an emphasis on being an integrated team. This gives us a 360-degree view of every transaction and that is where we think our advantage lies.”
Blueprint’s focus has almost exclusively been on the credit side, focusing on underlying investment managers. The firm has raised private credit funds and has grown not just by investing in managers but by getting involved in independent credit situations, co-investments with underlying managers and doing direct lending in the corporate sector, Walthour said.
“There were a number of reasons why this partnership made a lot of sense to us. There is a long-standing relationship between two of the key principals, we have very strong focus on credit, and we share the philosophy of finding credit situations with an asymmetric risk-return profile and payoff. Downside protection is really important to T30 and to us,” Walthour said. “I think we also share values on how we want to interact and be perceived by our colleagues, customers, clients and our communities.”