Hunter Street Partners and Rice Park Capital have launched a residential loan investment platform. The platform will initially target performing and non-performing residential transition loans used to help renovate and sell properties in need of repair.
MINNEAPOLIS, August 11, 2020/PRNewswire — Hunter Street Partners (“Hunter Street”), a Minneapolis-based alternative investment management firm, is pleased to announce it has partnered with Rice Park Capital to invest in portfolios of loans secured by single-family and small multi-family properties. The scalable investment platform closed an initial acquisition and will evaluate assets across the U.S., initially targeting performing and non-performing residential transition loans used to help renovate and sell properties in need of repair.
The Hunter Street and Rice Park Capital partnership brings together two veteran investment teams with significant investment experience in opportunistic residential real estate. Hunter Street CEO and CIO, Neal Johnson, brings two decades of experience, with prior roles at Isles Ranch Partners, Värde Partners, University Capital Strategies Group, and Piper Jaffray. Nick Smith, Founder and Managing Partner at Rice Park Capital, 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.
“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 Mr. Johnson. “We’ve known the team at Rice Park Capital for many years, and we’re excited to partner with them to meet the financing needs of transition loan borrowers, while also capitalizing on dislocated and deep value opportunities we’re seeing in that market.”
“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,” added Mr. Smith. “Compounded with increases in home demand, we’re confident the home renovation industry will play a key role in meeting U.S. housing demand.”
According to the National Association of Home Builders, the median age of the owner-occupied housing stock increased from 31 years in 2005 to 37 years in 2018. In addition, according to the June 2020 report regarding new residential construction by the U.S. Department of Housing and Urban Development (HUD), single-family housing starts were down 17.8% year-over-year and total housing starts were down 23.2% year-over-year. The HUD report also noted that the listed inventory of new and existing homes was down 5.4% and 18.8% year-over-year, respectively.
About Hunter Street Partners
Hunter Street Partners is a Minneapolis-based alternative investment management firm that provides capital solutions to operating partner teams and lower middle market companies across corporate finance, real estate, and specialty finance. The firm is focused on fundamentals-driven, asset-oriented credit and equity opportunities. Learn more about Hunter Street Partners at www.hunterst.com.
About Rice Park Capital Management
Rice Park Capital Management LP is a Minneapolis based alternative investment firm with deep roots in real estate and structured products. Rice Park manages active investment strategies in the fixed income alternatives, real estate and financial technology markets.