✈️ Allegiant $412M Loan Takeoff

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Last week, the market experienced a vibrant landscape of CRE financing and high-stakes funding across various sectors. The market was buzzing with opportunities and challenges, from Bank OZK's $233M Fulton Market deal to Allegiant Travel's record-setting $412M aircraft loan. Stay tuned for insights on winners and losers in this fast-paced financial arena. PLUS a new bridge lender…in just 4 minutes!

Let’s get into it.

Top Weekly CRE Deals

• Bank OZK and Manulife fund Fulton Market office with $233M (Read)

• PGIM fuels LA's housing boom with a $144M loan (Read)

• Northmarq seals a $142M refi loan for SoCal multifamily assets (Read)

• Madison Realty dishes out a $115M loan to L.A. multifamily (Read)

• Grand Central landlords score $101.5M refi loan from BMO & Citibank (Read)

• CBL Properties JV $79M loan from The Outlet Shoppes of Atlanta (Read)

• Bank OZK greenlights Aria Development with $77M for Brickell condo (Read)

• TD Bank funds $73 million for Gowanus residential project (Read)

• Värde Partners backs $58M loan Houston hotel acquisition (Read)

• CRC bags a $54M loan from City National Bank in Tampa (Read)
  
  
  Extra, Extra

  CIT Bank $44M construction loan (Read)
  PNC Bank $30M Refi loan (Read)
  Maxim Capital $26M (Read)
  RRA Capital $20M acquisition loan (Read)
  40|86 Mortgage Capital $20M Refi loan (Read)
  Seven Hills Trust Closes $17.3M Loan (Read)

Insight Summary
Last week saw vibrant CRE financing, with standout deals like Aria's $77M loan for a Miami condo project and LaTerra's $143.5M injection into LA apartments. Despite market fluctuations, key players like Bank OZK and Värde continued to back substantial projects. While the debt arena has its hurdles, such as challenging refinancing conditions, companies like Triangle Assets secured a $101.5M office refinance. As traditional banks tread carefully, alternative lenders and debt funds are gearing up for more action, creating a mixed bag of opportunities and risks.

▲ Winners:
◦ Owners of multifamily, industrial, and solid office assets benefit from lender demand to finance these property types
◦ Bank pullback and rising borrower demand create prime capital deployment opportunities for alternative CRE lenders
◦ Continued successful financing of multi-family and condo projects boosts developer confidence in these sectors.

▼ Losers:
◦ Owners of Underperforming Retail and Weaker Office Spaces face considerable challenges in obtaining refinancing, indicating significant financial hurdle
◦ Agency and private credit growth could sideline traditional banks, but stricter lending standards may mitigate losses.
◦ Lenders facing maturing loans should scrutinize at-risk deals and bolster reserves due to refinancing challenges.

Top Weekly ABL and Equipment Deals

• Amicus Therapeutics lands $430M financing deal with Blackstone (Read)

• Allegiant gets a $412M loan from BNP Paribas & Jackson Square (Read)

• BXP's credit facility grows by $315M via M&T Bank syndicate group (Read)

• Ashtrom’s solar project lands $270M from a BHI bank consortium (Read)

• BMO Bank catalyzes Willdan Group with a $150MM credit facility (Read)

• HireRight Expands $55 Million Refi Loan from Bank of America (Read)

• Elligo Health gets $40M from Horizon Tech Finance (Read)

• Rosenthal Extends $20 Million in Multiple ABL Deals (Read)

• FrontWell Capital Partners fuels Borealis Foods $25M loan (Read)

• SLR Healthcare ABL fuels skilled nursing with a $16MM revolving credit line (Read)
  
  

  Notables

  Wintrust $15 Million Credit Facility (Read)
  Rosenthal $6 Million Purchase Order loan (Read)
  Clarus Capital $5MM lease (Read)
  Republic $3.5 million loan (Read)
  Rosenthal $3.5MM twin purchase order deals (Read)
  nFusion $2M factoring loan (Read)
  Sallyport Provides $1M Facility (Read)
  Enhanced Capital $1M loan (Read)

Insight Summary
Last week saw a flurry of high-stakes funding across various sectors. Allegiant Travel's $412M deal set new benchmarks in airline finance, while Ashtrom Renewable Energy’s $270M green eco-financing. Borealis Foods and Elligo Health Research secured targeted funding in niche markets. Yet, the divide widens as firms like Amicus Therapeutics thrive with a $430M Blackstone partnership while smaller players grapple with capital limitations.

▲ Winners:
◦ High-growth startups, tech firms, and manufacturers are expanding market share through increased funding; highlighting growth potential is key to securing capital.
◦ Innovative borrowers, like Allegiant, benefit from alternative lenders offering creative financing solutions and should consider diverse funding options.
◦ Agile lenders, like Rosenthal and other specialty finance firms, are capitalizing on opportunities traditional banks reject.

▼ Losers:
◦ Overleveraged and struggling firms face limited options, potentially driving them to sell or restructure.
◦ Slow-growth firms, particularly those in stagnant industries, face limited lending options due to performance challenges.
◦ Regional banks focused on local markets face reduced deal flow and should concentrate on relationship-based lending and generating fees.

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Top Lender Credit Facilities

• Fora Financial diversifies with a massive $130M debt capital injection (Read)

• M&T, BankUnited, and Webster bolster Emerald Creek with $110M loan (Read)

• Clearco snags $100M facility from Pollen Capital (more)

• Wingspire provides $50M secured credit to Conserv Capital (Read)

• Bright Money secures $50M facility from Encina Finance (Read)

Insight Summary
This week, niche-focused lenders like Wingspire offered a $50M facility to Conserv for construction and trucking finance. At the same time, Emerald Creek locked in a $110M credit line for its CRE lending expansion, and Fora secured $140M for small business loans. Conversely, fintechs are hitting roadblocks; Clearco only managed to raise $60M against a $100M target, indicating investor wariness. In summary, lenders with targeted skills and rigorous underwriting successfully allocate capital in a divided market, but areas like fintech need to adapt.

▲ Winners:
◦ With Conserv's new credit facility, equipment lenders can look for alternative growth financing.
◦ Emerald Creek Capital's line of credit indicates that the CRE market is still robust.

▼ Losers:
◦ Inflation and rising rates strain small businesses, complicating cost management and affordable financing.
◦ The venture capital landscape has seen a 48% drop in funding, making it more challenging to invest in promising startups
◦ Specialized or niche lenders like inventory lenders are also facing challenges posed by rising interest rates

Market Summary
Last week showcased a surge in lending opportunities, particularly in Miami, LA, New York, and Chicago, signaling a fertile ground for banks and private lenders. Colorado is leading the pack in development size with a colossal 3M square foot Denargo project in Denver, closely followed by Arizona's 1.1M square foot Buckeye I-10 Logistics Building and Texas's 490K square foot San Antonio venture. Specialty financing, like invoice factoring and equipment finance, is gaining traction in LA, while NYC is becoming a hotspot for bridge and acquisition financing. However, activity was subdued in secondary markets like Chicago and Houston, indicating a more cautious approach may be prudent for lenders in these areas.

Key Insights
⮞ Lenders financing luxury condos and multifamily in Miami benefit from continued migration and new money wealth
⮞ Banks in NYC can offer credit facilities to established office owners, as demand remains strong in prime submarkets like Midtown
⮞ Multifamily lenders in LA should target bridge loans for new development projects, as rents and occupancy stay resilient
⮞ Invoice factoring firms can expand purchasing power for fast-growing logistics and transportation companies.
⮞ Given high vacancy and remote work trends, construction lenders face potential risks on speculative office projects and should stick to pre-leased buildings with credit tenants.
⮞ Retail lenders in secondary markets should avoid marginal malls and strip centers as traditional retail struggles with e-commerce competition.

😲 DIDN’T SEE THAT ONE COMING

• Barretts Minerals and its Texas arm hit the Chapter 11 reset button (Read)

• WeWork dodges a $95M interest bullet, raising red flags (Read)

🤵 LENDER LOUNGE

Looking to close your CRE deal? This week’s CT lender could help:

Time to Close: 2-3 weeks
Paperwork Required for LOI: None, we need details of the deal for review and pricing
Min to Max Loan: $50K to $2M
Sweet Spot: $120,000 – $300,000
Min FICO Score: 650 – credit scores down to 620 can be reviewed on exception basis and will require 6 months of interest reserves
Interest Range: 10.24% (floor) - 12.74%
Loan-To-Value: Up to 80% of Purchase Price, Up to 90% of Purchase Price + 100% of Renovation Costs, p to 75% As-Is + 100% of Renovation Costs
Origination Fee: $1,500 minimum – points depend on loan size
Due-Diligence Fee: $995 legal fee, $495 Underwriting fee, $129 Collateral Desktop Appraisal Review + Cost for the appraisal
Collateral Requirements: Non-Owner Occupied 1-4 Family Real Estate, Condos, Townhomes, 5+ Multifamily Apartments
Repayment Terms: Monthly, interest-only payments
Pre-Payment Penalty: There is no prepayment penalty.
Extension of Loan: 6 months
Geography: Do not lend in are ND, SD, VT, AK, NV—no rural areas.
Refinance into a longer-term loan: Yes, a 30-year DSCR loan

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