Dekel Capital has launched a new credit platform offering multifamily owners and investors mezzanine and preferred equity capital between $2 million and $10 million for the acquisition and refinancing of assets throughout the United States. 

The new capital strategy adds to the Los Angeles-based real estate merchant bank’s suite of services that provide real estate investors and owners with financial solutions across the entire capital stack including permanent loans and joint venture equity.   

“The dislocation in the capital markets has placed a severe burden on today’s real estate owners, especially those who are exiting construction loans or facing maturing senior debt and are not in a position to sell,” said Dekel Founder and Managing Principal Shlomi Ronen.   “With lower LTVs, increasing operating costs, and pressures of covenant compliance, lenders are requiring owners to come up with more equity or risk losing financing or worse their asset.   Preferred equity fills the gap in the capital stack and allows sponsors to use what equity they have more wisely.” 

With an increasing number of preferred equity investors entering the market, Dekel will cater to what they believe is an underserved segment of the real estate borrowing community 

“What we are seeing in today’s lending environment is the majority of borrowers still needing to fill on average a $2 million to $10 million gap,” added Dekel Vice President Benjamin Grosberg.   “The majority of this type of capital is offered by institutional players, and they simply can’t carve those smaller allocations out of a billion-dollar fund.”   

Dekel plans to deploy $100 million in preferred equity over the next 12 months.  While focusing on multifamily, Dekel will also consider other commercial assets on a selected basis. 

Earlier this year, Dekel launched a correspondent lending program, under the direction of Managing Director Vishal Vanjani, to originate fixed-rate Life Insurance and CMBS loans on behalf of several capital providers including a global asset manager and large Canadian bank.   

“Through our various strategies we are able to structure the entire capital stack and provide borrowers with financing that can be significantly less than what they were paying on their existing floating rate loans, especially given where indices are right now,” added Ronen.