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Minneapolis-based Hunter Street Partners, an investment management firm, is partnering with Rice Park Capital to invest in portfolios of loans secured by single-family and small multi-family properties. The investment platform will evaluate assets across the U.S., initially targeting performing and non-performing residential transition loans, which are used to help renovate and sell properties that need repairs done.
"The recent uncertainty caused by the COVID-19 pandemic had led to a retrenchment of traditional capital providers in the residential transition loan market even though fundamentals for housing have remained relatively stable," said Hunter Street CEO and CIO, Neal Johnson, who brings two decades of experience with prior roles at companies like Isles Ranch Partners, Värde Partners and more. "We've known the team at Rice Park Capital for many years.
Johnson added that together Hunter Street Partners and Rice Park Capital will look to meet the financing needs of transition loan borrowers, while also capitalizing on dislocated and deep value opportunities we're seeing in that market, according to a press release.
"The outlook for the transition loan market is strong, driven by an aging housing stock, resilient home prices, and a severe undersupply of affordable homes," said Nick Smith, founder and managing partner at Rice Park Capital, who has 22 years of experience, including roles at the Blackstone Group, Incenter Mortgage Solutions, Two Harbors Investment Corp, Green Tree Investment Management, and GMAC ResCap. "Compounded with increases in home demand, we're confident the home renovation industry will play a key role in meeting U.S. housing demand."