San Francisco-based private lender Kiavi announced Monday that it has closed another multimillion-dollar securitization of residential transition loans (RTLs), bringing its six-month volume of issuances to nearly $1 billion.
The $350 million unrated securitization announced this week adds to similar transactions that have taken place since the start of the year. In February, the company announced a $350 million bundling of RTLs, and it followed that with a $300 million deal in May. Kiavi has now securitized more than $4.7 million in short-term RTLs (aka fix-and-flip loans or bridge loans) across 18 transactions since 2019.
The lender said its newest offering “garnered interest from a broad set of institutional investors” and wound up selling out. Like its prior deals, this one includes a two-year revolving period during which investors can reinvest their principal returns to purchase newly originated loans.
“We’re thrilled to announce yet another securitization to support our growth plans of enabling more real estate investors with reliable, competitively priced capital to scale their businesses,” Arvind Mohan, CEO of Kiavi, said in a statement. “This securitization furthers our capital advantage, bringing our half-year issuance to nearly $1 billion. Our consistency, track record, and performance continue to garner significant institutional demand for Kiavi’s RTL assets.”
Barclays Capital Inc. was the structuring agent for the deal, while Nomura Securities International Inc. and Performance Trust Capital Partners served as joint bookrunners and co-lead managers.
The single-family rental and fix-and-flip sectors, like other types of housing, have been in a funk due to higher mortgage rates and relatively low inventory levels. But recent data from Attom showed that the gross profit margin for home flippers reached 30.2% in first-quarter 2024, the third time in four quarters that the figure had increased.
The vast majority of real estate investors are individuals and small companies, but institutional investors have taken heat for buying up large chunks of homes, which has allegedly raised prices and lowered supply in some areas of the country. This month, Senate Democrats introduced federal legislation that would require bulk homebuyers, including large corporations and private equity firms, to report these transactions to federal regulators for antitrust review.
