Broadmark Realty Capital Announces Plan to Retire Broadmark Private REIT, LLC

Rhea-AI Summary

Broadmark Realty Capital Inc. (NYSE: BRMK) has announced the retirement of its private fund, Broadmark Private REIT, LLC, which participated in construction loans. This move, expected to have no significant impact on earnings, involves reallocating approximately $42 million in loan participations to BRMK. The liquidation and asset distribution to investors are set to be completed by the end of Q3 2021. According to CFO David Schneider, this decision reflects the company’s enhanced funding flexibility and plans to introduce a new private investment vehicle in the future.

Positive

• Retirement of the Private REIT reflects improved funding capabilities.
• Reallocation of $42 million in loan participations directly to BRMK enhances control over assets.
• CFO indicates potential future private investment opportunities, improving growth prospects.

Negative

• None.

Broadmark Realty Capital Inc. (NYSE: BRMK) (“BRMK” or the “Company”), an internally managed secured real estate finance company, today announced its decision to retire Broadmark Private REIT, LLC (the “Private REIT”), a private, non-traded fund that participates in construction loans originated by Broadmark Realty Capital Inc. This process is expected to have no significant impact to the Company’s earnings.

The Private REIT’s outstanding loan participations will be re-allocated to BRMK for a cash payment by BRMK equal to the carrying value of the Private REIT’s loan participations as of August 1, 2021, which is projected to be approximately $42 million. The Private REIT will distribute 100% of its assets in excess of liabilities to its investors based on their relative percentage interests. The liquidation of the Private REIT and distribution of its assets is scheduled to be completed by the end of the third quarter 2021. Upon completion of the re-allocation, BRMK will hold 100% of the participation interests in its outstanding loans.

“The Private REIT was intended to support the public company’s growth and given our continued progress in broadening our sources of funding, we have made the decision to retire the Private REIT. We are very comfortable with the resources and financial flexibility we have in place to meet the demand for our loans. We believe the ability to access private capital provides a competitive advantage, and we expect to offer a new private investment vehicle in the future to complement Broadmark’s proven lending business. Our focus remains on sourcing and efficiently funding our loans to maximize value for the Company’s shareholders,” stated David Schneider, Chief Financial Officer.

Forward Looking Statements

Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may”, “should”, “would”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “seem”, “seek”, “continue”, “future”, “will”, “expect”, “outlook” or other similar words, phrases or expressions. These statements are based on the current expectations and are not predictions of actual performance. In addition, actual results are subject to other risks and uncertainties that relate more broadly to the Company’s overall business, including those more fully described in the Company’s filings with the Securities and Exchange Commission. Forward-looking statements are not guarantees of performance, and speak only as of the date made, and the Company undertakes no obligation to update or revise any forward-looking statements except as required by law.

About Broadmark Realty Capital

Broadmark Realty Capital Inc. (NYSE: BRMK) is an internally managed commercial real estate finance company that offers short-term, first deed of trust loans secured by real estate to fund the acquisition, renovation, rehabilitation or development of residential or commercial properties. Broadmark Realty Capital manages and services its loan portfolio across a variety of market conditions and economic cycles.

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FAQ

What is the recent decision by Broadmark Realty Capital (BRMK)?

Broadmark Realty Capital announced the retirement of its private fund, Broadmark Private REIT, LLC.

How much will BRMK reallocate from the Private REIT?

BRMK will reallocate approximately $42 million in loan participations from the Private REIT.

Will the retirement of the Private REIT impact BRMK's earnings?

The retirement of the Private REIT is expected to have no significant impact on BRMK's earnings.

When will the liquidation of the Private REIT be completed?

The liquidation and distribution of the Private REIT's assets are scheduled to be completed by the end of Q3 2021.

What are BRMK's future plans regarding private investment vehicles?

BRMK plans to offer a new private investment vehicle in the future.