Meridian Capital Group and Barings launch NewPoint Real Estate Capital – commercial commentator

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Meridian Capital Group as well as Barings start the week with a bang. New lending partnership platform, NewPoint Real Estate Capitalis launching today, the Commercial Observer reported.

A partnership that was first announced in January, also supported by a private investment company Stone point capital… Since the announcement, NewPoint has completed the acquisition Barings Multifamily Capital and is poised to enter the market by leveraging its relationship with Meridian and Barings’ lending and asset management capabilities.

The new platform is led by David Brickman as CEO as well as Jeff Lee like a president. Brickman was formerly CEO Freddie Macwhile Lee was previously head of an apartment building and head of the underwriting and asset management department in Capital one

In addition to Lee, NewPoint has recruited six large multi-family members to its senior management team, each with over 20 years of multi-family and agency lending experience: Phil Spellberg, Chief operating officer; Eli Tannus, head of capital markets; Joshua L. Schonfeld, head of available programs; Wayne Elibero, senior account manager; Bob Douglas, senior public relations manager; as well as Karoo Arulanandam, Head of Accessible Underwriting Department.

“I think this is an incredibly exciting time to launch our new platform,” Brickman said. “What is truly unique and makes this unique opportunity is that the stars align in terms of this opportunity to begin with. a new venture, which is also not new. It has huge sponsorship support from reputable institutional partners: Meridian, the giant real estate giant; Barings, also a significant player; and Stone Point Capital in the background. ”

“So we have fantastic sponsorships, each with deep roots in real estate, and yet we have a whole new platform,” he added. “We have the opportunity to create something that reflects not only the current state of the industry, but also how we think it will develop.”

Deeply rooted in agency lending, NewPoint will provide Fannie Mae, Freddie Mac as well as U.S. Department of Housing and Urban Development (HUD) /Federal Housing Authority (FHA) loans as well as custom financing and more tailor-made solutions for your loan needs outside the lending agency. It will focus primarily on multi-unit lending opportunities – both at market rates and at affordable prices, as well as senior housing, healthcare and industrial housing. NewPoint also intends to reinvent multi-unit securitization.

The launch of the platform follows the ever-growing interest of investors in the multi-family sector, which only underlined its recognition as a true safe asset class during the COVID-19 pandemic and led investors to reallocate capital to it, rather than including asset classes. under the weight of a pandemic.

“Multi-family companies continue to ride a huge wave,” Brickman said. “Investors see the need for multi-family housing in the US and that the long-term prospects for rental housing in particular are extremely high, so we will see continued construction and continued strong price increases.”

Brickman said NewPoint will be able to stand out from the growing sea of ​​competition on the lending side by drawing on deep leadership expertise and filling capital stacks emerging in the post-COVID world that are too complex for conventional multi-unit loans.

“Given where pricing is in an apartment building and where traditional lending standards are, it is difficult to meet capital needs with a first mortgage, as is currently done,” Brickman said. “Privileged capital and mezzanine are part of [the solution]but the big opportunity is actually rethinking part of the equation. So, is there a way to provide additional first mortgage capital using capital markets? I think this will be the strongest side of this platform. ”

Thus, NewPoint will identify pockets of capital to partner with and create a new securitization mechanism to provide higher leverage for the institutional multi-family product with strong sponsorship.

“Multi-family companies have long been underrepresented in CMBS,” Brickman said. “And I think there is an opportunity to rethink securitization for apartment buildings. Of course, this is what we were able to do at Freddie Mac when we developed our securitization program, and I think there is an opportunity to look at something similar in the non-agent world. ”

As for the timetable for the launch of the new securitization mechanism, “we have to crawl before we go,” Brickman said. “But our ambition will definitely be by the end of this year.”

After all, “in many cases, you can hardly get 70 percent leveraged funds in a large family,” Brickman said. “Given the asset class and its safety, we want to figure out how to get slightly higher leverage, which in turn would make the return more attractive to investors, and in terms of debt, I think this is a real opportunity.”

As for the name of the new platform? This marks a new perspective and a shift from traditional multi-family financing to more efficient and innovative models. But as Brickman said, this is not your typical startup where the leadership team draws on years of experience to move to the next iteration of multi-family lending.

“Our sponsorship, our network of connections and relationships, and our expertise will truly enable us to do really great and innovative things that will make a big difference in the marketplace,” Brickman said.

Chairman of the Board of Meridian Ralph Hertzka also chairman of the board of directors of NewPoint bye the president Yoni Goodman is a member of the board. Ben Silver, Co-Head of US Real Estate at Barings, is also a member of the board.

“We are very excited to start this new chapter. Our partnership with Barings will allow us to join forces with one of the world’s leading asset managers and bring Meridian back into the direct agent lending arena, ”Hertzky said in a statement. “Through the leadership, vision and creativity of David Brickman, our goal is to make NewPoint a fast platform for multi-family financing across the country.”

“The completion of this transaction represents the next step in our roadmap for Meridian’s growth and development,” added Goodman. “With the launch of NewPoint, we will turn our attention to increasing the number of products and products and further developing Meridian’s mortgage brokerage and investment sales units nationwide.”

“Barings is delighted to continue to work with NewPoint and their impressive team led by David and Jeff.” Silver said… “The combination of Meridian’s world-class project creation capabilities and Barings’ broad institutional strengths uniquely enables NewPoint to have a significant impact on all aspects of multi-family finance.”

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