Oaktree, Veleta Capital gear up institutional lending platform

Oaktree Capital Management and Veleta Capital have formed a new strategic commercial real estate lending platform, Veleta Capital Partners.

The venture will provide 12-to-36-month senior secured transitional loans on multifamily and commercial real estate assets of up to $20 million. Alternative commercial assets including self-storage, cold storage, medical office properties, data centers, industrial and warehouse properties are also targets in the strategy.

Brian Murphy, CEO and managing partner at Los Angeles-based Veleta, said short-term, value-add and opportunistic lending are a core part of the private equity and credit manager’s strategy. Additionally, this partnership with Oaktree marks a significant step toward the goal of including more comprehensive lending and technology solutions and initiatives.

“Veleta is not a distressed debt fund, and we didn’t set out to time the market, but we’re very well capitalized and nicely positioned to take advantage of the uncertainty in the marketplace,” Murphy told Real Estate Capital USA. “Volatility often leads to opportunity and we’re certainly seeing a lot of opportunity across the lending landscape.”

As part of the venture, Oaktree acquired a minority stake in Veleta with the aim of providing additional certainty of execution to real estate investors. The platform’s aim is to provide institutional-quality loans in what the partners see as a fractured and underdeveloped transitional multifamily marketplace, added Kaj Vazales, co-head of North America for Oaktree’s Global Opportunities strategy.

The venture will initially be focused on Tier I and Tier II submarkets – predominantly in the western United States, including Southern California, Arizona, Colorado, Nevada, Oregon, Texas, Utah and Washington – and it will evaluate other opportunistic transactions nationwide.

Andrew Marcus, Veleta Capital’s managing partner and chief operating officer, noted that pairing up with the $166 billion investment firm will allow Veleta to quickly build out the platform in terms of scale and market share.