NEW YORK CITY—A recently formed joint venture between Spruce Capital Partners and Tall Pines Capital has originated more than $85 million in loans to 40 projects, predominately in Brooklyn and Manhattan.
The principals credit strong borrower relationships, plenty of available capital and a "lightning speed" ability to close loans within the largely unaddressed market of smaller and medium-sized developers with making their new $170 million first-position real estate lending vehicle into such an active lender.
"Emerging developers in hot neighborhoods have the local expertise to identify and set-up very rewarding deals but they need access to capital—which they often need on a near-immediate basis," says Robert Schwartz, principal of the venture, called S3. "Traditional lenders are not interested in lending on these deals and most other funds cannot perform due diligence as quickly as we can and often they do not have ready cash."
Already more than 40% deployed, S3 executives expect to continue to generating loans and building momentum for the fund.?"Our deal flow has been incredibly robust as a result of funding our first few loans with talented developers in just a few days," notes principal Joshua Crane. "The development community is tight-knit and information-efficient: when someone starts a deal the details get transmitted to the rest of the market and very quickly we were acknowledged to be an effective player."
Adds Emanuel Stern, who co-founded Tall Pines earlier this year with Bradley Settleman and also is vice chairman of Hartz Mountain Industries, "Tall Pines' mission is to connect with those who leverage their expertise into opportunities that might not be apparent to conventional enterprises. When we met Robert and Joshua and heard about their plans to create a highly scalable platform to partner with local investors and developers, we were thrilled to create a structure that allows them to expand S3's lending platform, and for us to participate."
"S3's lending spectrum ranges from $1 million to $20 million with a 'sweet spot' of $2 million to $10 million," says Schwartz. "It is extremely satisfying to provide a more creative source of capital to investors in the New York market."
Schwartz and Crane have developed, invested in, and managed many residential and commercial projects, ranging from the luxury condominium at 151 E. 78th St. in Manhattan to 1209 Dekalb, a luxury rental in Brooklyn, and mid-rise projects in Virginia and Maryland.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
