In September 2022, TCG PL33 LLC, an affiliate of Miami-based Neology Life Development Group, acquired a 7.3-acre development site for $32.1 million with a loan supplied by Hermitage Palmer Land LLC, according to a release shared with Multifamily Dive.
“The sponsors were going to buy this piece of property at a time when it would have been very difficult to get a bank loan,” Brett Forman, owner of Boynton Beach, Florida-based private commercial real estate lender Forman Capital. “Rather than taking time with the banks, one of the two sponsors just put up their own balance sheet and wrote the loan with no intention of holding it.”
That’s where Forman Capital came in. On April 25, the lender purchased the note originated by Hermitage Palmer. It financed the entire loan with equity and closed in just 30 days.
“We wanted to own the paper because we liked the borrower and we'd like to do the construction financing,” Forman said. “And we believe now we're in a better position to be the construction lender. And they have $24 million more in their pocket.”
Neology, which is led by CEO Lissette Calderon, plans a three-phase mixed-use development at the 7.3-acre site, which is zoned for up to 1,800 residential units. “It's a very healthy project and with very healthy sponsors,” Forman said.
It's not the first time Forman financed a Neology deal. In 2021, it originated a $78.2 million construction loan for the developer to finance construction of a 14-story rental tower in the Miami neighborhood of Allapattah.
“We know Lisette,” Forman said. “We know her abilities, and we know she will get this project going and we’d just like to be a part of it going forward.”
More lending opportunities in the future
With the lending market grinding to a halt, Forman sees more opportunities to purchase and finance existing notes and provide short- and medium-term construction financing.
“We're seeing a tremendous need for construction lending and we actively are pursuing construction lending,” Forman said.
Forman provides debt and equity financing for transactions ranging from $10 million to $100 million, focusing on short-term construction financing, mezzanine debt and preferred equity.
“We need good strong sponsors that can deal with cost overruns and put up extra cash,” Forman said. “We need people that are experienced and can get things built. And we need good real estate.”
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