Alex Kleyner and his real estate debt investment firm ABK Capital has been redefining the booming real estate investment Banking and advisory services in South Florida with his recent announcement of commercial real estate advisory services to compliment Kleyner's growing mezzanine finance and debt instruments offered to local developers.
ABK Capital is a real estate investment banking firm providing a wide range of convenient and strategic funding options for property developers in Florida and elsewhere. Based in Miami Beach, Florida, the company works with both institutional sponsors and independent developers and is invested in several asset classes in the real estate industry.
All operations at ABK Capital are overseen and closely monitored by the co-founders of the company, Alex Kleyner and Brian Hernandez. Both Alex and Brian possess deep and extensive knowledge of real estate debt capitals markets and they put that knowledge to good use in their various debt investments and capital raising endeavors. The expansion from the small company that started in Miami-Dade County a few years ago has done deals in Sunset Island, South Beach, Key Largo, Fort Lauderdale, Ulis, Boynton Beach, and continues to find new deals with the ever growing development of Florida.
Senior Secured Financing Solutions - Due to the low-risk, stable income environment of senior secured loans, the latter naturally is a preferred choice for most investors---both small and big. Given the strength of a company's assets, one can secure anything from $400,000 all the way up to $15,000,000 million.
However, the restrictions around senior secured loans have become more stringent ever since the global financial crisis of 2008. Subsequently, it has become considerably more difficult to obtain senior loans from traditional lending institutions especially by small and mid-sized businesses, often hailed as the cornerstone of American economy.
However, even under the present scenario, Alex Kleyner wanted to make sure that ABK Capital tries its best to source some kind of senior loan for its valued partners that at least meets a good part of the financing requirements for any particular project. ABK leverages its deep market knowledge and transaction experience to achieve the above.
Non-Traditional Financing Solutions have been growing and project lead Brian Hernandez's experience and deep relationships in the sector prove to be most valuable when it comes to arranging non-traditional bridge financing options of various types. Whether or not a project is able to secure some type of senior loan, ABK ensures that the project is still able to raise the necessary capital through a number of typical investment-grade lending options something that is at the core of ensuring a stable business for both Hernandez & Kleyner.
Mezzanine Financing which is usually defined as a hybrid between equity and debt, mezzanine loans play a crucial role in filling out considerable capital gaps for various real estate sector projects including property developments, refinancing, buyouts and acquisitions. This type of loan is especially valuable for small and medium property developers who, as we already mentioned, often find it difficult to finance their project via senior financing alone.
It is worthwhile to point out here that although mezzanine loans can be considered as a bridge financing option, one must not confuse it with typical 'bridge loans.' The latter, for one thing, are short term loans with typical repayment tenures of a few weeks (although, in certain exceptional circumstances, the tenure may extend for up to 1-3 years). In addition, all the interest paid for a bridge loan is taxable as per the law whereas all interest related to a mezzanine loan is exclusively tax-exempted.
Furthermore, as Diane a spokesperson remarks, “ABK always seeks to arrange mezzanine loans (whenever it is feasible) for the reason that they give the lender a greater range of control over specific borrowing circumstances such as profit dividends, flexible negotiation options vis-à-vis the terms of loans, internal rate of return, etc.”
Preferred equity is another popular option when additional capital is required beyond what can be secured through a senior debt. However, in contrast to mezzanine loans, the preferred equity is typically used for larger real estate projects. Sponsors and developers will also often use preferred equity as a way of capital stacking that involves stacking different priority positions and lending terms on top of each other.
Due to reduced risk exposure (preferred equity investors are placed right behind senior lenders and in front of other private lending channels, sponsors or investors), it is again somewhat difficult for small- to mid-sized developers to secure preferred equity for their projects.
However, since ABK is passionately involved in funding residential property development (single-family houses, condos, multi-family apartments) especially in South Florida and the company focus is not exclusively devoted to high-value transactions, Kleyner claims that they do their best to secure preferred equity for relatively smaller development and refinancing projects as well.
The claim is supported by the fact that ABK has already played the role of intermediary in several construction building projects (condominium units, apartment complexes as well as commercial warehouses) in Martin, Broward, Palm Beach, Miami-Dade and Monroe Counties, among others.
According to Alex Kleyner, right now there are immense requirements for capital in the US real estate market. In the residential sector alone, the requirements far exceed the existing gross bank credit for the sector. And if one looks beyond at the larger sector that includes various high-value acquisition, construction and re-financing in commercial real estate, there are virtually limitless requirements for capital infusion, Alex remarks.
Given this scenario, intermediary services and advisors have a huge role to play in securing capital by way of pursuing various types of debt investments. According to the owners of ABK Capital, this is what drove them to launch the company back in 2014.
Hernandez puts in that well-organized professional advisors and intermediary services in the real estate sector are still very thin. As such, there is enormous growth potential for any company that can provide perspective, higher value and strategic insight to developers and sponsors.
Based on their holistic insight on the market and by way of leveraging their extensive relationships and deal flow, ABK is able to arrange flexible and bespoke capital strategies for any project, no matter how unique or complex. Get in touch with ABK and speak to their expert strategists to find the best and the most sophisticated solutions to your real estate endeavor. From capital raising to restructuring to strategic advice, whatever your need be, you can rely on ABK to receive the best assistance in terms of speed, flexibility, and certainty of execution.
