IZO Capital Launches $120M Structured Finance Platform for New Rental Projects
Company leaders are targeting multiple asset categories.
IZO Capital has launched a $120 million fund focused on originating senior stretch construction loans for middle-market projects across the U.S.
The fund will target traditional multifamily, build-to-rent, student housing and active adult senior developments, with the average loan range expected to be between $20 million and $50 million.
A Greenwich, Conn.-based lending platform specializing in new rental housing development financing, IZO Capital anticipates most demand coming from the multifamily and BTR segments. Since the launch, IZO Capital has closed one deal in Seattle. Details on the loan were not disclosed. The firm also has three to four deals in process, according to David Israel, co-founder and CEO.
“IZO offers senior stretch first mortgages ranging from 70 percent to 85 percent loan-to-cost on a non-recourse and partial recourse basis,” Israel told Multi-Housing News. We provide borrowers with dynamic pricing based on both macro and micro factors in the local real estate market and in the broader capital and fixed-income markets,”
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Israel and Peter Porraro, co-founder and chief investment officer, see an opportunity to provide flexible financing solutions to rental housing sponsors as traditional capital sources continue to pull back from middle-market development opportunities.
Developer-to-developer approach
The firm focuses on building long-term borrower relationships that help developers navigate an increasingly fragmented lending environment. Israel noted the firm’s developer-to-developer approach helps IZO Capital function as a financing partner throughout the lifecycle of a project.
Founded by a team of experienced real estate and alternative investment professionals, the firm combines an average of 25 years of development expertise and 30 years of lending experience. The leadership and ownership have collectively completed more than 1,000 transactions totaling more $15 billion in value. IZO Capital and its ownership group have more north of $4 billion in assets under management.
Israel is responsible for investment structuring and oversees risk management initiatives. He leads the asset and portfolio management divisions for the firm’s funds and separate accounts, in addition to working with institutional partners to enhance IZO’s private credit offerings. A real estate finance veteran, Israel previously held leadership roles at DRA Advisors, Louis Dreyfus Property Group, Real Estate Capital Partners, Thor Fidelity and Mark Capital.
Porraro’s 30-year CRE career includes being a founding partner of Mill Creek Residential, where he served as president of the investment management division and as a member of the investment committee. During his tenure at Mill Creek, he oversaw the company’s development and construction activities in the Northeast and Mid-Atlantic.
Porraro also served in other roles at Mill Creek and its predecessor Trammell Crow Residential over a 16-year span. Prior to joining Trammell Crow, he was a vice president at Real Estate Capital Partners.
