IRVING, Texas, March 19, 2018 (GLOBE NEWSWIRE) — ReadyCap Commercial, LLC (www.readycapcommercial.com), a leader in small-balance commercial real estate mortgage finance, securitized $164.96 million of newly originated first-lien, conventional fixed rate commercial real estate mortgage loans. Moody’s Investors Service, Inc. and DBRS, Inc. assigned a “Aaa(sf)” and “AAA(sf)” rating, respectively to the senior most certificates (and ratings to various other classes) of the pool. The transaction is backed by 50 fixed-rate assets including 47 whole mortgage loans and 3 senior participation interests in whole mortgage loans, each secured by first liens on 54 commercial and multifamily properties.
“ReadyCap is excited to drive additional issuances off its own fixed rate CMBS shelf with its fourth small-to-mid balance CMBS securitization of commercial real estate loans,” said Anuj Gupta, President of ReadyCap Commercial, LLC. “We continue to progress as a meaningful borrower alternative to traditional stringent prepay 10-year CMBS loans by offering varying loan terms from 2-10 years, future funding for mid-stabilized properties, earnouts, prepayment flexibility with step down prepay penalties among other structural solutions to optimize a sponsor’s flexibility and plan for the real estate. ReadyCap also continues to demonstrate to its investors that traditional real estate underwriting discipline can be applied to small-to-mid size loans with consistency and is aligned with investors through its continued dedication to the small balance CRE sector, and belief in market fundamentals.”
According to Moody’s Pre-Sale Report, approximately 47.3 percent of the pool balance is secured by properties that represent asset classes Moody’s considers among the least volatile. These sectors include multifamily (34.6 percent), industrial (8.9 percent), anchored retail (2.4 percent) and manufactured housing (1.3 percent). Furthermore, loans representing only 3.4 percent of the pool balance were secured by real estate located in small or tertiary markets, well below the Moody’s 2017 small market conduit average of approximately 13.5 percent.
According to DRBS Structured Finance: CMBS Presale Report, the pool is relatively diverse based on loan size, with a concentration profile equivalent to that of a pool of 29 equal-sized loans. No loan accounts for more than 10 percent of the pool trust balance, and only two loans account for more than 5 percent of the trust balance. The loans are generally secured by traditional property types, with no exposure to higher-volatility property types such as hotels. There are only two loans, representing 5 percent of the pool, secured by non-traditional properties types (i.e., self-storage and MHC). There are 23 loans in the pool, representing 38.7 percent of the mortgage loan cut-off date balance, secured by multifamily properties. Multifamily properties benefit from staggered lease rollover and generally low expense ratios compared with other property types. None of the multifamily loans in the pool are currently secured by student or military housing properties, which often exhibit higher cash flow volatility than traditional multifamily properties. Lastly, only one loan, representing 0.7 percent of the pool, is secured by a property that is leased fully to a single tenant.
KeyBank National Association is the Master and Special Servicer. Deutsche Bank Securities Inc., J.P. Morgan Securities, LLC and Citigroup Global Markets Inc., LLC served as placement agents. The offered securities were placed with a broad array of investors.
About ReadyCap Commercial, LLC
ReadyCap Commercial (www.readycapcommercial.com), headquartered in Irving, Texas, is a non-bank, portfolio lender offering financing for small-to-mid balance fixed rate, multifamily and bridge loans nationwide. ReadyCap’s financing products for commercial real estate include fixed rate loans up to $25 million, small multifamily agency loans up to $7.5 million and bridge loans up to $40 million generally subject to minimum loan sizes of $1 million. Founded in 2012, ReadyCap is an indirect subsidiary of Sutherland Partners, L.P., the general partner of which is Sutherland Asset Management Corporation “Sutherland”). Sutherland, a REIT, is a publicly-traded real estate finance company that acquires, originates, manages and finances commercial real estate loans, and to a lesser extent, asset-backed securities where the underlying pool of assets consists primarily of commercial real estate loans and other real estate-related investments (NYSE: SLD).