Dwight Capital, in concert with its affiliated real estate investment trust, Dwight Mortgage Trust (DMT), is launching a new rescue capital platform aimed at aiding sponsors with equity shortfalls amid the current market volatility, the firm announced.
The Dwight rescue strategy will encompass preferred equity and mezzanine debt investments on multifamily, mixed-use, office, retail and independent/assisted living properties valued between $10 million and $75 million across the U.S. As a result of rising interest rates, Dwight is projecting that a significant percentage of loans closed over the past several years — particularly floating-rate bridge debt — will be unable to achieve U.S. Department of Housing and Urban Development, Fannie Mae, Freddie Mac or commercial mortgage-backed securities (CMBS) refinancing.
'Given the unprecedented number of loan maturities coming due in the next year, we want to be there to help our partners get through this period of lower-than-expected proceeds and higher-than-expected rates by providing them with solutions that will help them bridge the gap to recapitalization and future stabilization by providing them with creative financing solutions,' Adam Sasouness, co-founder of Dwight Capital and DMT, said in a statement.
Tim Groves, chief investment officer at Dwight, said the added preferred equity and mezzanine capabilities coupled with the firm's existing bridge loan and construction lending products will help DMT deploy more than $2 billion in new loan originations in 2023.
DMT is partnering with Miami-based 27 Capital, a real estate private equity firm, on the rescue capital initiative.
'We could not ask for a better partner than Dwight for this strategy,' Arash Gohari, founder and CEO of 27 Capital said in a statement. 'Dwight's national reach and immense access to capital, along with their loyal and diversified borrower base, is the perfect platform on which to build this strategy.'
Andrew Coen can be reached at EMAIL.