Toorak Capital Partners Completes Its Second Rated Residential Transition Loan Securitization
$237.5 Million Deal Rated by Morningstar DBRS Follows First-Ever Rated RTL Securitization Closed by Toorak in February 2024
TAMPA, Fla.–(BUSINESS WIRE)–Toorak Capital Partners, Inc. (“Toorak”), a leading capital provider to the residential real estate lending industry, announced the successful closing of its second rated residential transition loan (“RTL”) securitization, Toorak 2024-RRTL2, a $237.5 million deal rated by Morningstar DBRS.
Toorak closed the first-ever rated RTL securitization (a securitization backed by short-term bridge loans generally used to rehabilitate residential properties), Toorak 2024-RRTL1, in February 2024. That deal was also rated by Morningstar DBRS, which in October 2023 became the first Nationally Recognized Statistical Rating Organization to finalize a methodology for RTL securitizations. Toorak has been working with Morningstar DBRS and other rating agencies for six years to share information about the RTL asset class, providing historical performance data and sharing its credit philosophy.
Morgan Stanley led the offering and served as an initial purchaser along with Deutsche Bank Securities Inc., J.P. Morgan Securities, LLC, Performance Trust Capital Partners, LLC, and KKR Capital Markets.
“The successful completion of our second rated RTL securitization this year is a testament to the impact Morningstar DBRS’s methodology is having on the industry,” said John Beacham, Founder and CEO of Toorak. “The framework Toorak pioneered has become the industry standard, and we have been pleased to see multiple other issuers enter the rated RTL securitization market.”
The initial collateral underlying the Toorak 2024-RRTL2 securitization consisted of 521 residential transition loans that financed approximately 661 housing units. The securitization featured a sizeable portion (53.22%) of collateral originated by Toorak’s affiliate company Merchants Mortgage & Trust Corporation, LLC (“Merchants Mortgage”), a leading nationwide private lender.
Tighter eligibility criteria for revolving loan collateral allowed a higher percentage of the deal to be marketed in senior tranches. The transaction features a two-year revolving period, during which time proceeds from loan payoffs can be reinvested in new loans.
To date, Toorak has issued over $3.7 billion in securitizations across 14 deals, including 2 rated and 8 unrated revolving transactions backed by RTL loans and 4 rated transactions backed by long-term investor loans on rental properties.
About Toorak Capital Partners
Toorak Capital Partners is an integrated correspondent lending platform that funds business-purpose loans backed by residential, multifamily, and mixed-use properties throughout the U.S. and the U.K.
With capital commitments from credit funds and accounts managed by KKR, a leading global investment firm, Toorak has revolutionized the way private lenders of business purpose real estate loans access capital. Toorak was the first to link small-balance commercial and residential originators with institutional capital and has perfected this approach in the single-family residential bridge, multifamily bridge, and 30-year single family rental lending space.
Toorak’s principals have a deep understanding of mortgage credit in the residential and commercial space with backgrounds in real estate lending, capital markets, securitization, asset-liability management, asset management and credit. Since inception, Toorak has provided more than $13 billion in capital and funded over 35,000 mortgage loans. Toorak-funded projects are expected to renovate, stabilize, or provide rental housing for over 50,000 families. Further information is available at www.toorakcapital.com.
About Merchants Mortgage
Merchants Mortgage is a leading nationwide private real estate lender specializing in non-owner-occupied fix & flip properties, ground-up construction, multifamily, and DSCR financing. For over 60 years, the company has been a trusted partner for real estate investors across the U.S., excelling at funding complex transactions, providing logical loan structures, and delivering fast, predictable underwriting to meet the timing and transaction needs of the market. In 2022, Merchants Mortgage was acquired by global investment firm KKR, expanding the company’s resources and reach in the real estate lending market. Further information is available at www.merchantsmtg.com.
Contacts
Joshua Greenwald
[email protected]
646-504-7306
