Real estate developer and investment firm Denholtz Properties on Wednesday announced the launch of the Denholtz Opportunity Fund II, which offers tailored, capital solutions through preferred equity and or mezzanine debt, providing proceeds of $5 million and $25 million per project, subordinate only to first mortgage debt.
This specialized fund is designed to support commercial real estate owners in the preferred geographies of New Jersey, New York, Pennsylvania, Florida and the Southeast to navigate temporary capital challenges including operating deficits, refinancing obstacles, unmet sale projections, cost overruns and leasing below initial estimates.
Managed by Denholtz Properties CEO Steven Denholtz and President Stephen Cassidy, the fund’s custom capital solutions are built on the company’s deep understanding of the asset management process and the needs of today’s real estate operators.
“As owners ourselves, we are acutely aware of the capital challenges today’s macroeconomic environment brings to owners and developers,” Denholtz said. “We are proud to introduce our bespoke rescue capital solutions to the commercial real estate community to help companies find success in a difficult market.”
According to J.P. Morgan Private Bank, nearly $1.5 trillion of commercial real estate debt is due to mature within the next two years. Despite the growing need for financing solutions, the Mortgage Bankers Association anticipates a 38% decline in commercial and multifamily mortgage borrowing and lending in 2023 compared to 2022. Consequently, there will be an exponential increase in the need for preferred equity and mezzanine debt to bridge the current challenges facing property owners.
Cassidy added: “The financing gap has been driven by a multitude of factors, including interest rate hikes and several high-profile commercial banking failures in the first half of 2023. As a result, many operators continue to be faced with temporary challenges in securing needed financing for under-construction or operational buildings. Our rescue capital platform is designed to provide immediate financial assistance to help close the financial gap and help commercial real estate developers and operators bring their projects to life.”
For more information about the Denholtz Opportunity Fund II and how to schedule an introductory call with the Denholtz Properties team, click here.