New York-based Slate Property Group saw growth in its platform of multifamily-related commercial real estate investments over the past few years, most notably in its lending and impact investing businesses.
Since its inception in 2012, the company has typically focused on ground-up residential development and acquiring add-value multifamily properties. Slate Property Group also has a debt business through which it has been actively originating bridge and construction loans of $50 million to $250 million, said Martin Nussbaum, principal.
The firm can sit anywhere in the residential capital stack from a financing perspective. “We were active lenders pre-covid. Once Covid hit, it created a unique opportunity in the lending market,” Nussbaum said. The lending market used to have more competition, but as the universe of potential lenders has shrunk, deal flow has increased for the firm, he added.
From the borrower’s perspective, “the surety of execution” is the factor that the firm focuses on in today’s market, Nussbaum said. “A surety that if you say you’re going to sign a term sheet, you’re going to honor those terms, and come and close the loan subject and nothing materially changes.”
Impact investing
The firm’s impact investment business is centered around affordable housing and transitional housing – temporary accommodation for individuals and families to bridge the gap between homelessness and permanent residency.
“The type of impact investing we’re doing is creating new long-term solutions with services that help and support the people living within the communities,” Nussbaum said.
He continued: “We’re building transitional housing for a specific end user, buying existing buildings and converting them to transitional housing, as well as buying existing transitional housing and retrofitting them.”
One recent transaction funded by the company, for example, is a hotel in California that was converted to a homeless shelter, according to Nussbaum.
Utilizing diverse platforms across development, equity and debt, Slate Property Group is solely focused on the residential sector, with Nussbaum seeing impact investing as an extension of residential investment that supports the living of a different demographic.
“We have established a residential platform to support housing needs across the life cycle of any New York City resident. The quality and attention to detail of each asset is the same from transitional to 100 percent affordable to fully market rate housing,” said Nussbaum.
Multifamily platform
Slate Property has also been an active equity investor and last year acquired $300 million of multifamily buildings. It has also entered into a contract for a large multifamily building on the Upper West Side in New York.
“The markets are functioning, but the flow of new investment opportunities has been slow to return to a normal pace,” said Nussbaum, adding that the company’s overall strategy is to be a low-leveraged buyer and a good supplemental lender on the debt side.
“We’re going to have to endure a volatile period,” he said, noting that the company can navigate headwinds by taking a long-term investment view and employing low leverage.
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