Partners Capital Teams Up with Investment Management Firm to Launch Bridge Lending Company
Los Angeles-based Partners Capital has established a joint venture with a $700 mil Western U.S.-based investment management firm to launch Archway Fund, a private bridge lender that combines the two firms’ resources to create a more flexible and competitive company.
The two organizations have a relationship that predates the venture. However, the venture presents opportunities to gain operating efficiencies by integrating departments, which will translate into increased production. The venture also provides a scalable framework for projected production growth.
Archway Fund will provide primarily first trust deed loans up to 75% LTV for transactions that cannot execute with conventional commercial real estate financing for a very wide range of reasons such as very quick closing deadlines, high vacancy rates/tenant turnover, sponsor/managing member credit issues. The new company will provide financing for opportunistic and value-add commercial real estate transactions ranging between $2 mil and $15 mil and with terms of up to 24 months. Property types include investor single family residences, apartments, office, industrial and retail throughout the Western United States.
While operating under the Partners Capital umbrella, the loan production division, Partners Capital Finance, provided $80 million in loans during 2016. As part of the joint venture, the division becomes a department equipped to deploy $100 million in the 12-month period following the late February opening. Partners Capital is a private commercial real estate investment firm.
Archway Fund will operate independently of Partners Capital under the direction of Mark Reese, who joined the firm as a consultant to organize the platform rollout and will be transitioning to vice president of loan origination tasked with building the transaction pipeline. He comes to Archway with extensive expertise in early-stage, privately capitalized debt platforms, most recently Buchanan Street Partners of Newport Beach, CA. Reese also served as a loan originations analyst and underwriter for a major insurance company, as well as acquisitions analyst and financial analyst for private real estate firms.
“Archway will be stepping into a much more competitive environment than I encountered in 2010 and 2014 during the rollout of other platforms,” said Reese. “Archway’s strengths are primarily derived from nimble capital which positively impacts our entire process from low closing costs, quick decisions, multi-state coverage, and non-punitive renewal options,” he said. “Execution is everything and I’ve learned that the investment required to deliver a flawless term sheet yields a borrower signature on the first iteration. The term sheet drops into the loan committee impact nearly intact, which in turn flies through loan committee, and finally makes its way into the loan agreement, intact. This perfectly executed term sheet encapsulates the predictable process we strive to achieve.”