Greystone’s Expands Its Bridge Financing Capabilities With $600 Million CLO Offering
Greystone, a leading commercial real estate lending, investment, and advisory company, announced the closing on September 13, 2019, for Greystone CRE Notes 2019-FL2, Ltd., a $600 million CLO backed exclusively by bridge loans on primarily multifamily properties.
Greystone CRE Notes 2019-FL2 is the company’s third CLO. The initial collateral pool for 2019-FL2 consists of 24 loans totaling $492.1 million that Greystone originated, secured by mortgages on 24 properties in nine states. Greystone will invest the remaining $107.9 million of CLO proceeds over the next 180 days into comparable mortgages. The CRE CLO accretively provides financing at a weighted average coupon at issuance of L+1.46%, before transaction costs.
“Our newest CLO expands our ability to meet the financing requirements of our borrowers. This transaction, coupled with our previously issued healthcare CLO, further strengthens our balance sheet as we continue to expand our match-funded non-recourse financing structures,” said Jeffrey Baevsky, Executive Managing Director of Corporate Finance and Capital Market Finance at Greystone. The company has successfully originated high credit-quality collateral with anticipated attractive returns through a well-established bridge lending program and experience working with investors, owners and operators in the multifamily and senior housing space. “This CLO further demonstrates Greystone’s role as a leader in multifamily lending,” Baevsky added.
The three-year actively managed CLO offers seven classes of notes, including a senior structure consisting of $336.75 million Class A tranche, with a AAA rating from Moody’s and Kroll Bond Rating Agency. Greystone will transfer most of the collateral from its 2017 CRE CLO into the new Greystone 2019-FL2 and its 2017-FL1 deal is expected to be fully redeemed.
All of the loans were originated by Greystone, which offers a bridge loan product as part of its lending program. Greystone has originated $4.7 billion in bridge loans since its program launched in 2004, and today, bridge loans make up approximately 5% percent of Greystone’s $35 billion loan servicing portfolio.
Greystone’s extensive participation in the broader multifamily market includes mortgage and mezzanine lending, management and ownership/operational advisory activities. The company is a top 25 U.S. commercial mortgage lender specializing in FHA, Fannie Mae, Freddie Mac, CMBS and short-term balance sheet lending. In 2018, Greystone originated over $1 billion in bridge financing, representing approximately 10% of Greystone’s $10.3 billion of annual loan origination volume.
Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and UBS Securities LLC acted as placement agents of Greystone CRE Notes 2019-FL2, Ltd. with U.S. Bank National Association serving as Trustee.
