Hunter Street, Rice Park Capital Launch Residential Loan Platform

Hunter Street Partners and Rice Park Capital will team up to launch a new investment platform of portfolios of single-family and small multi-family properties loans.

Hunter Street Partners is an investment management firm based in Minneapolis. Rice Park Capital Management is an investment firm that focuses on real estate and structured products, and is also based in Minneapolis.

Neal Johnson, CEO and CIO at Hunter Street Partners, said the COVID-19 pandemic’s impact had caused uncertainty in the traditional residential transition loan market, despite fundamentals for housing remaining “relatively stable.”

The lack of supply of homes in comparison to rising demand for housing drove the partnership. The media age of owner-occupied housing stock has fallen in the last decade, from an average of 31 years old in 2005 to 37 years old in 2018, according to the National Association of Home Builders.

New construction is not keeping up with demand either, as the June 2020 new construction report by the U.S. Department of Housing and Urban Development showed that construction starts on single-family housing was down 17.8 percent from last year. Total housing construction starts were down 23.2 percent from last year. The HUD report showed that overall inventory of available homes was down 5.4 percent for new homes and 18.8 percent for existing homes.

The new partnership will “meeting the financing needs of traditional loan borrowers, while also capitalizing on dislocated and deep value opportunities” in the market, Johnson said.

Rice Park Capital’s founder and managing partner Nick Smith said the transition loan market is “strong” as a result of “aging housing stock, resilient home prices, and a severe undersupply of affordable homes.”  Combined with increased demand for homes, Smith said he’s confident the home renovation industry will help meeting housing demand in the country.