Dekel Capital has launched a new credit platform focused on supplying equity for acquisitions and refinances in the current tight debt market, Commercial Observer has learned.
The Los Angeles-based real estate investment firm’s new credit strategy is geared toward providing multifamily sponsors with mezzanine and preferred equity capital between $2 million and $10 million. Shlomi Ronen, Dekel’s founder and managing principal, said the offering is designed to help property owners in need of equity to finance their assets in a climate with stricter underwriting standards and higher operating costs.
“The dislocation in the capital markets has placed a severe burden on today’s real estate owners, especially those who are exiting construction loans or facing maturing senior debt and are not in a position to sell,” Ronen said in a statement. “Preferred equity fills the gap in the capital stack and allows sponsors to use what equity they have more wisely.”
Dekel plans to deploy $100 million in preferred equity over the next 12 months under the initiative. While the platform will initially target multifamily properties, Dekel will also consider other property sectors on a “selected basis.”
“What we are seeing in today’s lending environment is the majority of borrowers still needing to fill on average a $2 million to $10 million gap,” Benjamin Grosberg, vice president at Dekel, added. “The majority of this type of capital is offered by institutional players and they simply can’t carve those smaller allocations out of a billion-dollar fund.”
The new equity strategy was unveiled on the heels of Dekel launching a corresponding lending program in January to originate fixed-rate life insurance and commercial mortgage-backed securities loans. The new platform, which has a $500 million pipeline, is run by Vishal Vanjani, who previously oversaw lending at CION Investments.