Partners Capital Finance Inc. DBA Archway Fund and the principals of alternative investment manager Oakhurst Advisors have successfully completed a recapitalization of the Los Angeles-based direct portfolio bridge lender, which will now originate short-term commercial real estate debt under the new name Archway Capital.
In its first fund of several planned funds under the new name, Archway Capital will provide short-term, fixed-rate senior debt between $2 million and $20 million for the acquisition or recapitalization of industrial, multifamily, office, SFR and select internet-resistant retail assets in high-density and urban markets throughout the United States. It will provide non-recourse, interest-only, fixed-rate loans up to 75% LTV with high single digit rates.
Discussions between the principals of the newly formed Archway Capital, who collectively have $6 billion in assets under management, started back in the fall of 2019, according to Archway Fund founder Bobby Khorshidi, who will now serve as president and CEO of Archway Capital.
“The world certainly has changed since then and this recapitalization provides us with the strength and capacity to close quickly on loans at a time of uncertainty in the real estate capital markets,” said Khorshidi. “It might seem a little counterintuitive, but I believe there’s no better time than now to lend. There’s been a market reset, and we’re able to start fresh and consider real estate values where they are today, not where they were six months ago.”
Many floating-rate bridge lenders are reliant on collateralized loan obligations as a financing tool, a market which is “almost entirely frozen,” according to a recent Bloomberg column. This has forced many of these alternative lenders to the sidelines or to exit the market entirely, creating a tremendous opportunity for balance sheet lenders like Archway Capital as well as borrowers seeking much needed liquidity during these troubling times, according to Khorshidi.
“Through the enhanced strength of our partnership, we are in the position of being able to actively lend fresh capital, without any exposure to pre-Covid valuations, to current and future clients despite constricted market conditions,” he said.
