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New Managers September 2018

PROFILES: JLJ Capital, Austere Capital

 

JLJ Capital launches maiden bridge financing fund

Real estate is under pressure-rising interest rates, a significant imbalance between supply and demand as well as sky-high valuations are keeping some buyers and investors on the sidelines. Developers too, are having a difficult time getting bridge financing from banks for new buildings as regulations make this type of lending less appealing than it was before. Against this backdrop, New Jersey-based firm JLJ Capital is launching a new bridge financing fund. The firm says that the vehicle gives investors a way to be involved in the real estate market without taking on the risk of buying or selling real estate directly.

JLJ currently provides bridge financing to middlemarket commercial real estate firms from its own balance sheet. For the new fund, the management team is putting up $20 million of its own money in order to open up the fund to a broader range of investors early on. "We want investors to be comfortable with our process and to understand that we think the thesis for this type of financing is strong," says JLJ co-founder Jonathan Lewis in an interview with Opalesque

The firm primarily focuses on east coast markets including New York and Florida, but will consider other opportunities if the investment case is strong.

JLJ's management team has a 30-year background in real estate financing and has leveraged that experience to streamline the lending process in order to more efficiently diligence potential transactions and underwrite loans. Ideally, Lewis says, he wants to see that someone could qualify for financing from a bank but is looking at other options because they want a degree of certainty around financing.

That certainty is especially important now when there is more volatility in the real estate market. "We're regularly get......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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