Toorak Capital Partners Closes Inaugural Rated Single-family Rental Securitization
Updated: Mar 16, 2022
Toorak Capital Partners ("Toorak"), a leading correspondent real estate loan investment platform, today announced the successful closing of a $224.3 million securitization backed by 30-year single-family rental property loans. This is the first Toorak securitization transaction to carry ratings from S&P and KBRA. The offering received strong investor demand and was oversubscribed.
Toorak's securitization, TRK 2021-INV1 Trust, is collateralized by business purpose, rental investment property loans that were underwritten using debt service coverage ratios (DSCRs) and aggregated by Toorak. It represents the first investor DSCR transaction issued through the TRK shelf.
The securitization consists of 1,092 first lien, fixed- and adjustable-rate, fully amortizing, and interest-only residential mortgage loans secured primarily by 1-4 unit residences. Borrowers in TRK 2021-INV1 possess a weighted average (WA) credit score of 722. The pool's mortgaged properties exhibit a WA DSCR of 1.39x and a WA original loan-to-value (LTV) ratio of 71.7%.
"Toorak's entry into the investor rental market is a natural extension of our position in the residential bridge loan market," said Toorak Chief Executive Officer John Beacham. "The loans are underwritten based on rental income rather than wage income, in line with commercial real estate practice in the US and common practice in many international markets, such as the UK buy-to-let market."
"In addition to providing an attractive financing alternative for landlords, we are proud that the significant majority of properties that back the loans in the portfolio are affordable to renters earning typical incomes in their respective neighborhoods," John added.
Toorak is one of the largest capital providers to the residential private lending industry, funding over $6.0 billion in loans to renovate, stabilize or rent out housing in the United States and United Kingdom. In addition to residential bridge loans, Toorak's lending platform offers financing options for construction and long-term single-family rental projects.
About Toorak Capital Partners Toorak Capital Partners is an integrated correspondent lending platform based in Summit, NJ. Toorak funds small balance business purpose residential, multifamily and mixed-use loans throughout the U.S. and the United Kingdom. Backed by global investment firm KKR, Toorak acquires loans directly from private lenders. Toorak's principals have a deep understanding of mortgage credit in the residential and commercial space with backgrounds in real estate lending, capital markets, securitization, asset-liability management, asset management and credit. Toorak-funded projects have renovated or stabilized housing for more than 20,000 families to date – an average of approximately 500 families every month.