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Prudential and Red Stone Team Up

NEW YORK CITY-The joint venture can work on a range of deals from providing non-recourse financing with leverage up to 95% LTV on single assets of $5 million or more to portfolios up to $350 million.

By Barbara Jarvie | Updated on December 17, 2003

NEW YORK CITY-Prudential Mortgage Capital Co. and Red Stone Partners LLC have joined forces partnership to provide developers with tax-exempt financing. Red Stone, based here, is a newly formed affiliate of Prudential Real Estate Investors, which capitalized Red Stone on behalf of its institutional clients. The partnership will combine Prudential Mortgage Capital’s senior lending capacity with Red Stone’s equity and mezzanine capital. PMCC is the commercial mortgage lending business ofPrudential Financial Inc. Company officials expect the first deal to close early in the new year and to complete financings in the first year of between $500 million and $700 million.

The focus will be on the credit enhancement of tax-exempt multifamily bonds to facilitate the acquisition, refinancing, or construction/rehabilitation of multifamily housing properties. The partnership will offer its products through Prudential Mortgage Capital’s nationwide originations team. Red Stone has the capability to offer borrowers non-recourse financing with leverage up to 95% LTV on single assets of $5.0 million or more and portfolios up to $350 million.

Red Stone, managed by John Sokolovic and David Levine, will specialize in flexible and innovative tax-exempt bond financing solutions for multifamily properties.Sokolovic sees the venture well-positioned to compete with players such as Freddie Mac, Fannie Mae, Charter Mac and Minnie Mae. “We can offer a high level of proceeds and more flexibility.”"We have been expanding our affordable housing product line to meet the diverse needs of ourcustomers and have seen increased demand for tax-exempt bonds,” said David Twardock, president of Prudential Mortgage Capital. “With Red Stone, we see an opportunity to work with an outstanding team to leverage our overall platform and build on the strength of our originations team.”

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