Fund Management
OVERVIEW
Northmarq Fund Management (a wholly owned subsidiary of Northmarq) offers institutional-quality sponsorship with a 60-year history, a robust and diversified platform of $22B in debt and equity origination, as well as middle-market value-add bridge lending and mezzanine lending/preferred equity strategies.
Platform
- Full-service national platform with over 1,000 employees across 42 U.S. offices offering Debt and Equity Origination, Investment Sales, Agency Execution, Loan Servicing and Fund Management.
- Northmarq is the nation’s largest privately-held commercial real estate capital markets firm with a 60-year history and ownership by Pohlad Companies, a family office conglomerate with over $1.8 billion in annual revenues and employing over 4,200 professionals across 18 diversified businesses.
- The Fund Management Team is comprised of experienced capital formation, real estate credit investment and portfolio management professionals who have operated throughout several market cycles.
- Strong expertise in Agency execution as well as robust national Investment Sales and Loan Servicing platforms provide the investments with multiple paths to a successful exit.
Sourcing
- Robust sourcing platform of $22 billion in Debt & Equity origination and $16 billion in Investment Sales volume annually across 600+ originators and 42 U.S. offices.
- Long-standing relationships with over 600 repeat borrowers provide consistent proprietary deal flow over time.
- National view of sale listings & closings, debt & equity financings, and loan servicing performance offers real-time market intel and informational advantage.
- Upcoming wave of mortgage maturities as well as rising rates presents a growing opportunity for bridge loans, mezzanine debt and preferred equity over the next several years.
- Monitoring $20 billion of loans maturing in next three years that Northmarq initially financed. Loan data from $76 billion Servicing Portfolio also provides insights and opportunities.
Strategy
- Focus on middle-market value-add business plans that earn demonstrated meaningful rent growth after modest CapEx improvements and/or value creation.
- Cash flow from floating-rate loans in growth markets positioned to outperform throughout higher rate environments.
- Focus on loans that bridge to a permanent financing or to sale, following value-add execution or stabilization in the event of new construction.
- Take advantage of the increasing demand for mezzanine loans and preferred equity tranches that provide the critical capital to fill the widening gaps in current capital stacks.
- The current inefficient lending environment is driving borrowers to seek more costly financing sources to fund all projects, especially transitional and development projects that Northmarq actively sources.
PLATFORM
SOURCING
In 2022, Northmarq originated $5.5 billion in bridge lending transaction volume, $1.0 billion in mezzanine debt and preferred equity transaction volume, and another $950 million of bridge lending volume between 60-85% LTC.
STRATEGY: BRIDGE LENDING
Bridge lending will be well-positioned in the current environment, with cashflows set to benefit from rising rates and from demonstrated rent growth after value creation. Northmarq has financed and is monitoring $20 billion of loan maturities in the next three years alone.
Earnings Power
Focused on value-add business plans that earn demonstrated meaningful rent growth after modest CapEx improvements and/or value creation.
Inflation Protection
Cash flow from floating-rate loans in growth markets that are positioned to outperform throughout higher rate environments.
Investment Opportunity
Long-standing, repeat borrower relationships and robust Investment Sales platform can provide direct access to middle-market value-add deal flow. Monitoring $20 billion of loan maturities in 2023-2025.
Relative Value
CRE loans benefit from more favorable risk-based capital treatment than in years past. Floating rate returns and proprietary deal flow will help outperform alternatives.
Optionality
Platform provides multiple paths to a successful exit via extensive relationships and specific expertise in Investment Sales, Debt/Equity recapitalizations, Agency execution and Loan Servicing/Asset Management.
Diversified Portfolio
Diversification across sponsors, business plans, and geographically in the top 40 U.S. MSAs is important in achieving a balanced portfolio.
STRATEGY: HIGH-YIELD INVESTING
High-Yield investing will be well positioned in the current environment, with increasing demand for mezzanine debt and preferred equity financing given the dislocation in capital stacks today.
Earnings Power
Focused on value-add business plans that earn demonstrated meaningful rent growth after modest CapEx improvements and/or value creation.
Rescue Capital
Take advantage of the increasing demand for mezzanine loans/preferred equity tranches that provide the critical capital to fill the widening gaps in current capital stacks.
Investment Opportunity
Long-standing, repeat borrower relationships and robust Investment Sales platform can provide direct access to middle-market value-add deal flow. Monitoring $20 billion of loan maturities in 2023-2025.
Market Dislocation
The current inefficient lending environment is driving borrowers to seek more costly financing sources to fund all projects, especially transitional and development projects that Northmarq actively sources.
Optionality
Platform provides multiple paths to a successful exit via extensive relationships and specific expertise in Investment Sales, Debt/Equity recapitalizations, Agency execution and Loan Servicing/Asset Management.
Diversified Portfolio
Investments will be diversified across property type, business plan, sponsors and the top 40 U.S. MSAs, as well as sourced throughout Northmarq’s 42 offices nationally.
Northmarq Fund Management is a wholly owned subsidiary of Northmarq