Urban Standard Capital Launches Gap Financing Strategy
Real estate private equity firm Urban Standard Capital has launched a new strategy to deploy $100 million in gap financing, or rescue capital, including senior stretch financing, mezzanine and preferred equity for borrowers facing a financing gap.
The firm’s founder and CEO, Seth Weissman, said USC is offering the financing to borrowers who are unable to fully replace their existing debt due to higher interest rates and more restrictive debt ratios and covenants.
“Our strategy is simply to be a friendly, ‘white knight’ capital source,” said Weissman. “Our gap financing program is focused on distressed balance sheets, not distressed properties, with the objective of rightsizing the existing senior loan to meet current market underwriting in order to give the sponsor additional runway to stabilization.”
He added that with rising interest rates, he’s seeing financing gaps between 20% and 30% that need to be filled by new equity or alternative financing.
