Angel Oak Capital Advisors steps into commercial real estate lending

Angel Oak Capital Advisors entered the commercial real estate sector through the securitization of small commercial loans.

The investment management firm recently closed a $ 164.3 million securitization fully backed by small commercial loans raised by a subsidiary of Angel Oak Capital. Angel Oak said the securitization, dubbed AOMT 2020-SBC1, marks the first attempt at securitizing low-balance commercial loans.

“We have had remarkable success in our vertically integrated model, in which we can control all aspects of the residential mortgage process from creation to securitization,” said Berkin Kologlu, senior portfolio manager. “We have applied the same model to the commercial sector in order to continue to offer investors attractive opportunities like this in the future.”

AOMT 2020-SBC1 consists of 236 loans, which are primarily aimed at commercial real estate such as light industry, office, mixed use and retail. One third of the loans include residential components such as multi-family, duplex and triplex living spaces as well as mobile home parks. The portfolio had an average loan-to-value ratio of around 61% and debt service coverage of 1.50.

Along with the securitization, Angel Oak Commercial Lending has named mortgage vets Nik Chillar and Rick Gallitto as co-presidents. The duo will help Ben Easterlin, Managing Director of Angel Oak Commercial Lending, grow the business and improve its current practices and people.

“The completion and success of this securitization is a testament to our company’s commitment and prudent approach to this particular area of ​​the commercial real estate market where we see great opportunities to add value to both borrowers and investors,” said Easterlin.