Wrightwood Capital
(203) 651-5350
Wrightwood Capital is a real estate finance and investment company with a proven track record of more than 470 transactions closed and approximately $5 billion in capital invested. Wrightwood Capital's strategy is to provide capital to real estate operators seeking creative structuring, reliable execution and competitive pricing. With a national platform, Wrightwood Capital provides tailored capital products with attractive risk adjusted returns.
Debt:
Investment type: Senior secured commercial real estate loans
Investment focus: facilitating the consummation of high return, opportunistic transactions by providing relatively high leverage and underwriting complex and/or transitional business plans; transactions will typically involve the acquisition of discounted loans or properties, discounted payoffs or recapitalizations
Collateral: note acquisitions – senior collateral assignment of the loans, physical possession of the collateral documents and perfected UCC interest; property acquisition & recapitalization – first mortgage on the real estate
Sponsor Profile: Experienced real estate operators and/or debt investors
Loan size: $10MM-$25MM; will go higher on portfolios
Property type: multifamily (including broken/fractured condos), office, industrial, retail, manufactured housing communities, student housing and self-storage facilities; other types considered on a deal specific basis
Location: United States; generally MSAs with populations in excess of 1 million; smaller markets considered on a deal specific basis
LTV: 70% to 80%; will go higher on a deal specific basis
Going-in NOI: generally targeting a minimum initial yield-to-debt of 5%; will go lower on a deal specific basis
Pricing: all-in return of 9-11% comprised of an interest rate, pay rates reflecting the cash flow dynamics of the property, 1% origination fee and back-end compensation necessary to achieve the all-in return target; returns may be higher depending on asset quality and business plan execution risk
Call protection: determined on a deal specific basis
Cash reserves: reserves for payment of interest, capital expenditures, lease-up costs and workout expenses will be established at closing and disbursed by WWC pursuant to a defined draw process
Term: up to 3 years; performance-based extension options available, subject to increased call protection
Recourse: generally non-recourse, except for standard "carve-outs" for bad acts such as bankruptcy, fraud, etc
Closing: transaction driven; generally 30-45 days from signed application to closing
Subordinate Capital:
• Uses:
Acquisitions for core, core-plus, value-add opportunities, credit tenant build-to-suit
and development (admittedly selective post-crisis)
First mortgage refinance shortfalls (fill or help fill that deleveraging gap)
Debt paydowns to existing lenders to encourage extensions
Discounted debt (DPO) note acquisitions (by current owner or 3rd party purchaser if there is a clear path to the title)
TI & Cap Ex “good news” funding
Owner recapitalizations and partner buyouts
• Investment: $2MM-$12MM of mezzanine debt, preferred equity or joint venture equity for properties with values of $10MM-$75MM
• Term: 3 or more years co-terminus with the first mortgage
• Fees: 1-2%
• Return: 12-18%, made up of pay-rates of approx. 10% combined with either equity kickers or interest accrual to make up difference
• Recourse: typically non-recourse
• Property types considered: multifamily rental, anchored retail, office, industrial, student housing, manufactured housing, self-storage, mixed-use
• Property types excluded: fractured condos, land, anything for-sale by-the-unit, hospitality, senior housing and other such operating businesses
• Location: MSAs with populations of 1 million and greater with historic patterns of population and job growth
• Sponsor: operators with property type and local market expertise
• 3rd party first mortgage: term and rates necessary to execute the proposed business plan