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Redwood Trust Completes 5 Arches Acquisition

Phil Hall
Mar 06, 2019
Redwood Trust Inc. has closed its first securitization backed by single-family rental (SFR) loans since its Oct. 15 acquisition of CoreVest American Finance Lender LLC

Redwood Trust Inc. has announced the completion of its acquisition of 5 Arches LLC, an originator of business-purpose residential mortgage loans for the single-family rental, multifamily bridge and fix-and-flip residential real estate markets.
Consideration for the transaction was $50 million, which was payable through a combination of cash and Redwood common stock; the transaction was also inclusive of the $10 million in cash paid in May 2018 by Redwood Trust to purchase a 20 percent minority interest in the company. The New York City-based 5 Arches and 95-person staff will operate as a wholly owned subsidiary of Redwood, which is headquartered in Mill Valley, Calif.
“We are pleased to have completed the acquisition of 5 Arches,” said Christopher J. Abate, CEO at Redwood. “Our measured, incremental approach to this transaction allowed us to add a highly accretive and scalable platform while helping to ensure that the integration is a success for stakeholders of both Redwood and 5 Arches. We welcome the 5 Arches team and look forward to the opportunities that the combination affords.”

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