Firm sees opportunity in CRE market to provide value to both borrowers and investors
Angel Oak Capital Advisors has entered the commercial real estate sector through a securitization of small-balance commercial loans.
The investment management firm recently completed a $164.3 million securitization backed entirely by small-balance commercial loans originated by an affiliate of Angel Oak Capital. Angel Oak said that the securitization, labelled AOMT 2020-SBC1, marks its first foray into small-balance commercial loan securitizations.
"We've found notable success in our vertically integrated model, where we can control all aspects of the process from origination to securitization for residential mortgages," said Berkin Kologlu, senior portfolio manager. "We have applied this same model to the commercial sector in order to continue offering attractive opportunities like this to investors in the future."
AOMT 2020-SBC1 consists of 236 loans, which are predominantly geared toward commercial properties including light industrial, office, mixed-use, and retail. A third of the loans have residential components that include multifamily, duplex and triplex living spaces, and mobile home parks. The portfolio had an average loan-to-value ratio of around 61% and a debt service coverage ratio of 1.50.
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Along with the securitization, Angel Oak Commercial Lending has appointed mortgage vets Nik Chillar and Rick Gallitto as co-presidents. The duo will assist Ben Easterlin, managing director for Angel Oak Commercial Lending, in expanding the business, as well as in enhancing its current practices and staff.
"The completion, and success, of this securitization, is a testament to our firm's commitment and prudent approach to this specific area of the commercial real estate market, where we see great opportunity to provide value to both borrowers and investors," Easterlin said.
