Larry Silverstein’s new debt platform sees a “financing gap” in construction lending

New alternative-lending vehicle will enter space where traditional banks are still the go-to source

TRD New York /
Oct.October 19, 2018 12:20 PM

Larry Silverstein (Credit: Getty Images)

Larry Silverstein’s recently launched debt platform sees a “financing gap” in the construction lending space.

The investor and developer earlier this year set up its first lending venture, Silverstein Capital Partners, which is backed by a sovereign wealth fund and a pension fund with “deep pockets.”

The platform will focus on shovel-ready, ground up construction projects, as well as heavy value-add repositionings, land and inventory loans on completed condominium projects. Silverstein Capital will get into the capital stack through senior loans, bridge loans, subordinate loans, and rescue capital with its billion fund.

“There’s a lot of demand for capital and there’s a lot of good quality assets being built, but maybe at pricing that we think is higher than we would want to operate,” Michael May, president of Silverstein’s new lending vehicle, told Bloomberg. “Those projects need capital, in a spot where we’re very comfortable lending.”

Silverstein’s new venture hasn’t originated any loans yet, but it’s looking to jump into the alternative lending space that’s proliferated in the wake of regulations placed on banks following the financial crisis. It’s also looking at projects in Seattle, Los Angeles and Boston.

Originations by alternative lenders grew by more than 40 percent in 2017 from the year earlier to nearly $60 billion, according to Green Street Advisors.

Banks are still the go-to source for construction debt, but Silverstein’s May said it’s an attractive place for non-bank lenders.

“Construction is one of the few spots where you can get to double-digit yields in this market as a lender,” he said. [Bloomberg] – Rich Bockmann

 

Related Articles

arrow_forward_ios

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Joel Schreiber (Credit: Shir Stein and Wikipedia)

WeWork’s first investor used his stock as collateral. Now his lenders are suing him

California passes landmark rent control law

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

163 North 6th Street and the Tel Aviv Stock Exchange Bull (Credit: Google Maps, Wikipedia)

Joel Gluck’s Israeli bond issuance falls through as Williamsburg rental project faces financing crunch

NYC’s foreign investment landscape in the era of trade wars and heightened nationalism

Larry Silverstein and the Tel Aviv Stock Exchange (Credit: Getty Images)

Institutional investors swarm Silverstein’s new TASE bonds

arrow_forward_ios