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Angel Oak expands into commercial mortgage lending

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Angel Oak, one of the investment firms that have played a major role in revitalizing the securitization market for borrowers with less than pristine credit, is expanding into a new market.

The company said Monday it will start providing financing to commercial real estate owners, developers and investors. Angel Oak Commercial Lending will provide both short- and long-term financing for projects across the commercial sector, including multifamily, industrial, mixed use, retail, office, self-storage and other specialized segments.

“There is a lending void in specific segments of commercial real estate, especially those under $5 million in size,” Ben Easterlin, senior vice president of commercial lending at Angel Oak, said in a press release.

“In many cases," he said, "banks may be constrained in their ability to make commercial real estate loans due to government regulations or corporate limitations on the types and amounts of loans they can issue."

Easterlin, who joined Angel Oak in November 2017, has provided, arranged or consulted on over $3 billion of debt and equity placements while working at several previous lending firms over his 20-year career. He was most recently chief financial officer and executive vice president at Ansley Atlanta Real Estate, according to his LinkedIn profile.

The press release did not indicate whether Angel Oak intends to eventually securitize its commercial loans. Securitization of short-term debt financing the rehabilitation or repurposing of commercial debt has picked up sharply this year, in part because investors are attracted to floating-rate assets.

Angel Oak Commercial Lending will follow the success of the firm’s residential lending businesses, particularly in the non-QM market, where Angel Oak’s lending affiliates combined to issue over $1.1 billion in non-QM loans in 2017.

“Angel Oak has an established track record of providing financing in constrained and dislocated markets and sees commercial lending as the next extension of this line of thinking,” Easterlin said.

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Commercial mortgages CMBS