Slate Property Group launched its own real estate lending platform with a goal of issuing $500 million in mortgages this year.
The venture, dubbed SPG Capital Partners, will originate only senior mortgages, Slate’s co-founder Martin Nussbaum said. The Midtown-based developer’s first deal is a $19 million mortgage to fund Solomon Feder’s acquisition of a development site at 45-57 Davis Street in Long Island City. The developer plans to build a 150-unit, 10-story residential project on the lot, which sits close to Court Square.
“There’s a bigger need for non-conventional financing in the marketplace,” Nussbaum said, citing banks’ reluctance to finance, for example, condo development.
Apart from construction and land loans, SPG plans to focus on transitional, bridge and condo inventory loans of up to 80 percent of a project’s value. Slate will pay for the loans with its own funds and through institutional partners.
Slate isn’t the first development firm to get into the lending game. RXR Realty, RFR Realty, Moinian Group and Kushner Companies all launched mortgage platforms in a bid to fill the void left as banks retreat from development and bridge financing.
“There’s no doubt the space has gotten more competitive,” Nussbaum acknowledged.
Four of the top 10 firms in The Real Deal’s January ranking of last year’s biggest construction lenders were nonbank lenders.
Founded in 2014 by Silverstone Property Group founding principal Nussbaum and David Schwartz, formerly of Madison Realty Capital, Slate quickly emerged as one of the city’s most active development firms. Its biggest deal to-date was the $390 million acquisition of the RiverTower apartment building in Manhattan in 2015.
Last month, Slate and Madison Realty Capital put a Kips Bay apartment portfolio up for sale, asking nearly $120 million.