Redwood Trust said it is currently seeing a very robust pipeline of potential CMBS transactions.
Speaking at this month's JPMorgan 10th Annual Mid Cap Conference, Brett Nicholas, executive chief operating and investment officer at Redwood Trust, said the REIT is originating mezzanine loans and preferred equity investment on stabilized properties.
"Our focus is financing the gap that exists between the amount of equity a borrower will put into our property, and the amount of financing a senior lender will provide," Nicholas said.
At the end of November, Redwood's CMBS portfolio was almost $140 million, boasting yields of more than 10%. The average loan-to-value ratio is 71%. The company plans on financing this portfolio, Nicholas said, which will allow it to recycle capital back into the commercial business and generate even higher returns.
"We have unique credit expertise and work with portfolio, balance sheet lenders, CMBS aggregators and also the agencies on multifamily," he said. "Our access to capital comes from senior funding through partnerships with several major financial institutions."
