LAGUNA HILLS, CA– Harvest Commercial Capital, LLC (“HCC”), the nationwide non-bank leader in owner-occupied small balance commercial real estate loans, and Medalist Partners, HCC’s long term financing partner, announced today that they have completed a $218.5 million rated securitization of first-lien, SBA 504, and conventional fixed rate commercial real estate loans that the company references as HCCLT 2024-1.
Morningstar DBRS assigned a AAA rating to the most senior certificates along with ratings ranging from AA to B on five other classes of certificates. The closing of this transaction represents the first securitization of predominately owner-occupied small balance commercial loans since HCC closed HCCLT 2020-1 nearly four years ago.
HCC leaders Adam Seery, Todd Massas, and Jason Raefski shared their excitement, “With the closing of the HCCLT 2024-1 transaction, Harvest continues to set the national benchmark for securitizations of owner-occupied commercial real estate loans. Strong investor interest in the deal demonstrated the high level of appetite for this asset class and the quality of our origination product. This transaction is a testament to the hard work and dedication of our team, as well as the continued momentum at Harvest.” With continued growth across the platform and a robust origination pipeline, HCC plans to be a programmatic issuer moving forward.
The transaction was led by Mizuho Americas with Baird serving as joint bookrunner.
Deal Characteristics
HCCLT 2024-1 is a $218.5 million securitization with $175 million of committed collateral at the initial close, with the difference being pre-funded over a 90-day period. The initial close was collateralized by 114 small balance commercial mortgage loans, primarily made to small businesses and secured by owner-occupied commercial real estate properties. The mix of loans was recently originated by HCC in conjunction with the firm’s SBA 504 (58%) Conventional (37%) and Non-Owner Occupied (5%) programs. The initial collateral has an average outstanding principal balance of $1.53 million. The pool has a weighted average loan to value ratio of 51.9% based on third party appraisals. FICO scores were provided for all the HCC loans, with a weighted average FICO score of 748. The three largest property types within transaction are Multi-purpose Industrial (50%) Retail (20%) and Office (16%), respectively. HCC set an internal benchmark with 19 different investors participating in bond purchases.
About Harvest Commercial Capital
Harvest Commercial Capital originates, owns, sells and services first-lien small balance commercial loans backed generally by multi-purpose commercial real estate. HCC originates conventional loans and first-lien loans pursuant to the U.S. Small Business Administration’s (“SBA”) 504 loan program. HCC is majority owned by an affiliate of Medalist Partners, LP, an SEC registered investment manager with approximately $1.8 billion in assets under management across strategies in structured credit and asset-based private credit. HCC was founded in February 2016 and is based in Laguna Hills, CA. For more information, please visit www.harvestsbf.com.
