Dwight Capital’s REIT, Dwight Mortgage Trust, is launching a new CRE rescue capital fund that is a preferred equity and mezzanine debt platform to aid sponsors with equity shortfalls in connection with permanent loan refinancings.
The CRE Rescue Capital Fund is managed in partnership with Miami-based 27 Capital, a real estate private equity firm founded and led by Arash Gohari, on this initiative.
“Together with our existing bridge loan and construction lending products, the added preferred equity and mezzanine capabilities will assist Dwight Mortgage Trust in deploying over $2 billion of new loan originations in 2023,” said Tim Groves, chief investment officer at Dwight, in a statement.
Given the current rate environment, the firm said it expects a significant percentage of loans closed over the past several years — particularly floating rate bridge loans — will be unable to achieve cash neutral refinancing via HUD, Fannie Mae, Freddie Mac or CMBS.
Dwight Capital is among the largest commercial real estate finance companies in the U.S. and has a loan servicing portfolio in excess of $11 billion.
The rescue capital strategy is aimed at properties valued between $10 million and $75 million in the multifamily, mixed use, office, retail, independent/assisted living properties sectors in the U.S.
Dwight Capital and Dwight Mortgage Trust Co-Founder Adam Sasouness said that the “unprecedented” number of loan maturities coming due in the next year have pushed the firm to help its partners get through a period of “lower-than-expected proceeds” and higher interest rates with financing solutions.