February 20, 2025 04:57 PM Eastern Standard Time
LAGUNA HILLS, Calif.--(BUSINESS WIRE)--Harvest Commercial Capital, LLC (“HCC”) (http://www.harvestsbf.com), the nationwide non-bank leader in owner-occupied small balance commercial real estate loans, securitized $264.6 million of first-lien, SBA 504 and conventional fixed rate commercial real estate loans that the company references as HCCLT 2025-1. The transaction was led by Mizuho Securities USA, LLC with Performance Trust Capital Partners serving as Joint Bookrunner.
DBRS, Inc assigned a “AAA” rating to the most senior notes along with ratings ranging from AA to B on 5 other classes of notes. The closing of this transaction represents the second HCC securitization in the past 8 months with plans to issue at least one more in 2025. “HCC continues to see growth in the owner-user commercial landscape. We plan to be a programmatic issuer moving forward,” said CFO Jason Raefski.
HCC leaders Adam Seery, Todd Massas and Hugh O’Donnell shared their excitement, “With the closing of the HCCLT 2025-1 transaction, HCC continues to set the gold standard in non-bank commercial finance. This deal sets HCC records for size, pricing and investor demand, with most tranches significantly oversubscribed. We credit this successful result to our tremendous team at Harvest.”
Deal Characteristics
HCCLT 2025-1 is a $264.6 million securitization with $211.7 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 139 small balance commercial mortgage loans, primarily made to small business concerns, and secured by owner-occupied commercial real estate properties. The mix of the loans were recently originated by Harvest Commercial Capital, LLC in conjunction with the firm’s 504 (47%) Conventional (47%) and Non-Owner Occupied (6%) programs.
The initial collateral has an average outstanding principal balance of $1.52 million. The pool has a weighted average loan to value ratio of 55.4% based on third party appraisals. FICO scores were provided for all the HCC loans, with a weighted average FICO score of 731. The three largest property types within the transaction are industrial (47%) office (18%) and retail (15%), respectively. HCC brought in a total of 35 different investors participating in bond purchases.
Harvest Commercial Capital, LLC
Harvest Commercial Capital, LLC is a Delaware limited liability company that 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 $1.9 billion of net assets under management as of January 2025, that invests predominantly in securitized credit and asset-based private credit strategies. HCC was founded in February 2016 and is based in Laguna Hills, CA.