Harvest Commercial Capital and Medalist Partners Close Oversubscribed Securitization of SBA 504 and Conventional Real Estate Loans - $218.5 Million of Offered Certificates Rated by Morningstar DBRS
June 17 2024 - 10:43AM
Business Wire
Harvest Commercial Capital, LLC (“HCC”), the nationwide non-bank
leader in owner-occupied small balance commercial real estate
loans, and Medalist Partners, HCC’s long term financing partner,
announced today that they have completed a $218.5 million rated
securitization of first-lien, SBA 504, and conventional fixed rate
commercial real estate loans that the company references as HCCLT
2024-1.
Morningstar DBRS assigned a AAA rating to the most senior
certificates along with ratings ranging from AA to B on five other
classes of certificates. The closing of this transaction represents
the first securitization of predominately owner-occupied small
balance commercial loans since HCC closed HCCLT 2020-1 nearly four
years ago.
HCC leaders Adam Seery, Todd Massas, and Jason Raefski shared
their excitement, “With the closing of the HCCLT 2024-1
transaction, Harvest continues to set the national benchmark for
securitizations of owner-occupied commercial real estate loans.
Strong investor interest in the deal demonstrated the high level of
appetite for this asset class and the quality of our origination
product. This transaction is a testament to the hard work and
dedication of our team, as well as the continued momentum at
Harvest.” With continued growth across the platform and a robust
origination pipeline, HCC plans to be a programmatic issuer moving
forward.
The transaction was led by Mizuho Americas with Baird serving as
joint bookrunner.
Deal Characteristics
HCCLT 2024-1 is a $218.5 million securitization with $175
million of committed collateral at the initial close, with the
difference being pre-funded over a 90-day period. The initial close
was collateralized by 114 small balance commercial mortgage loans,
primarily made to small businesses and secured by owner-occupied
commercial real estate properties. The mix of loans was recently
originated by HCC in conjunction with the firm’s SBA 504 (58%)
Conventional (37%) and Non-Owner Occupied (5%) programs.
The initial collateral has an average outstanding principal
balance of $1.53 million. The pool has a weighted average loan to
value ratio of 51.9% based on third party appraisals. FICO scores
were provided for all the HCC loans, with a weighted average FICO
score of 748. The three largest property types within transaction
are Multi-purpose Industrial (50%) Retail (20%) and Office (16%),
respectively. HCC set an internal benchmark with 19 different
investors participating in bond purchases.
About Harvest Commercial Capital
Harvest Commercial Capital originates, owns, sells and services
first-lien small balance commercial loans backed generally by
multi-purpose commercial real estate. HCC originates conventional
loans and first-lien loans pursuant to the U.S. Small Business
Administration’s (“SBA”) 504 loan program. HCC is majority owned by
an affiliate of Medalist Partners, LP, an SEC registered investment
manager with approximately $1.8 billion in assets under management
across strategies in structured credit and asset-based private
credit. HCC was founded in February 2016 and is based in Laguna
Hills, CA. For more information, please visit
www.harvestsbf.com.
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Adam Seery President Aseery@harvestcref.com