Velocity Commercial Capital Inc. hopes to raise $175 million through an initial public offering of shares, using the proceeds to originate or acquire small-balance commercial mortgages.
The Westlake Village, Calif., company, which owned 319 loans with an average principal balance of $391,000 as of June 30, will become a real estate investment trust, according to a new filing with the Securities and Exchange Commission.
In 2009 the company began actively working with its borrowers — typically small investors rather than large institutions or corporations — to resolve troubles or dispose of troubled properties.
The portion of its loans at least 90 days past due was 11% as of June 30, compared to 5.4% a year earlier. It hopes to use that experience as commercial real estate delinquencies in the broader market continue to rise.
For the first half of this year the company's loss widened to $944,000, from $192,000 a year earlier, as net interest income dropped 16%, to $3.1 million.
