$50M Fund Targets Overlooked Borrowers
Thrive Lending launched a $50M fund targeting two kinds of borrowers that struggle to get traditional financing.
Thrive Lending founder and CEO JP Newman tells us the fund, which should hit about $85M in investments when fully funded, will focus largely on new construction while serving two overlooked kinds of borrowers: foreign nationals and redevelopment projects. Thrive specializes in loaning to foreign nationals, JP says. In 2014, 7% of all real estate sales were made by foreign nationals with two-thirds of the sales involving Latin Americans, he tells us. For many international players, it’s hard to get a loan in the US without a Social Security number or US citizenship.
Additionally, for major rehab projects, credit can be hard to get without a stabilized occupancy, JP says. This fund will provide private money across Texas and the Southwest for a variety of commercial real estate projects, as well as some new development and residential construction for builders. These loans are fully collateralized by real estate and range in term from six to 36 months. Already, the new fund is in negotiations for deals involving apartments in the Austin, Dallas and San Antonio markets, JP tells us. Thrive has already funded projects in these markets with apartment deals including Providence in Houston, Cascada in San Antonio, Estancia in Dallas (pictured) and The Sanctuary in Austin.
JP believes the credit market will tighten in the next 36 months, which means there will be a need for private money. JP doesn’t think it will be a repeat of ’07 with banks freezing their lending, but the times of easy credit will change. When the market tightens up, business goes up and it slows down when credit is flowing, he tells us. Even in the “bad times,” Thrive handles about $20M annually in loans, he says. Anticipating market growth, Thrive added 19-year banking industry executive Justin Brogna to run the operations. He was most recently the Austin president of Independent Bank, and will now serve as Thrive Lending’s COO, where he will be responsible for carrying out the fund’s operations and lending efforts.
