Hunt Real Estate Capital, a leader in financing commercial real estate throughout the United States, announced today the closing of its first commercial real estate collateralized loan obligation (CRE-CLO), Hunt CRE 2017-FL1.
“This is a major milestone for Hunt Real Estate Capital as it provides the Company with a predictable and stable source of long-term non-recourse balance sheet financing which will serve to supplement our existing warehouse lines,” commented James Flynn, President and Chief Investment Officer at Hunt Real Estate Capital.
The transaction will finance approximately $350 million of Hunt Real Estate Capital-originated floating rate bridge loans. Approximately $291 million of investment-grade notes were sold to 15 different institutional investors, with the company retaining the first loss non-investment grade piece of just under 17%.
The CLO provides for a replenishment period for primarily multifamily assets, giving the asset manager, Hunt Investment Management the ability to replace collateral with qualifying Hunt Real Estate Capital loans as existing deals mature or pay-off.
The securitization effort was led internally by the head of the Company’s proprietary lending business, Mike Becktel, Managing Director at Hunt Real Estate Capital. “We were very pleased with the execution, and believe the levels achieved are a clear reflection of the strength of the collateral as well as the overall platform,” noted Becktel.