ORIGINATOR PROFILE
Downtown Capital Partners
Downtown Capital Partners (“DCP”) is an alternative capital provider that provides short term bridge financing to real estate investors and senior secured loans to middle market companies. DCP is affiliated with an east coast based family office, which allows it to move quickly and creatively to meet its client’s needs.
Downtown Capital Partners’ short-term bridge loans are financing solutions for time sensitive asset acquisitions, pre-development project expenses, property redevelopment, repositioning, recapitalizations, and general liquidity needs. DCP will lend against properties nationwide, but has a focus in the Northeast. DCP provides loans ranging from $2 - $50 million in form of a first mortgage, a second lien or mezzanine debt with rates from 10% - 14% and terms of 12-24 months. As a family office utilizing its own capital, DCP offers its potential borrowers quick decision making and certainty of execution.
Downtown Capital Partners’ middle market loans are financing solutions for corporate borrowers when conventional sources of debt financing are unavailable or inadequate to the borrower’s needs. These middle market loans are used to fund acquisitions, refinance existing debt, provide working or growth capital, and provide liquidity in special situations. DCP provides senior secured loans ranging from $2 to $50 million to both companies with qualifying assets or cash flow and high net worth individuals.
Investment Diligence
Downtown Capital Partners evaluates each lending opportunity based on the type of collateral and loan itself. For each lending opportunity that passes initial examination and preliminary due diligence, DCP engages in a process of additional research, which often involves engaging third party experts to aid the underwriting process. DCP works with highly reputable outside advisors (lawyers, professional field auditors, appraisers and industry experts) as it deems necessary with respect to each lending opportunity. One of the key distinguishing features of DCP is its ability to work with complicated situations, assets, and deal structures if it can see through to the underlying value. The DCP principals are themselves investors, owners and operators in a broad range of investments, which allows them to recognize value beyond typical leverage ratios and easily understood assets or to be skeptical of conventional appraisals. DCP’s decision to issue a letter of intent (also known as a term sheet) and execute a loan agreement with any prospective borrower is subject to the sole discretion of DCP’s investment committee.
Investment Committee
Downtown Capital Partners’ investment committee serves a risk management function that must approve an investment while managing the risk profile of DCP’s portfolio. DCP usually underwrites and finances each transaction with its own capital first and subsequently retains a meaningful portion of each loan for its own investment purposes. All potential investments must have unanimous committee approval on structure, term, and proceeds prior to closing. The investment committee meets regularly to review current loans and those in the pipeline being underwritten.
Of the many potential transactions presented to DCP, the majority are rejected because of the inadequate risk-adjusted return they offer. Ultimate deal terms, deal structure and deal documents at the closing of a loan may differ from the letter of intent to reflect additional information discovered in the detailed due diligence process. The investment committee assesses each loan request with regard to asset specific and loan specific criteria and has final say prior to closing on the loan.
2 Represents an net annualized return, using an internal rate of return (IRR) methodology, with respect to the matured investments shown in your Portfolio experience, utilizing the effective dates and amounts of subscriptions and distributions to and from the investments, net of management fees and all other expenses charged to the investments.[read more]