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CMA
October 27, 2017  

Chinese Family Office Opens Lending Shop

Seven Valleys, the U.S. family office of Chinese investor Zhang Xin, is rolling out a lending platform that aims to originate $2 billion of bridge and mezzanine loans and other commercial real estate debt over the next two years.

The New York lender, Seven Valleys Capital, is likely to close its first loan in a few weeks. Headed by managing principal Jason Bordenick, it plans to invest $500 million of equity in the program and use leverage to fund the rest, holding the loans on its balance sheet.

The primary focus will be on floating-rate bridge loans of between $35 million and $100 million on office, multi-family, industrial and retail properties in major markets around the U.S. Proceeds will top out at 75% of a property’s value.

The shop also looks to originate mezzanine loans and preferred equity with core-type returns on stabilized office and multi-family properties. Those financings, ranging from $50 million to $300 million, would bring total leverage as high as 65%. And it will write construction and pre-development loans of $50 million to $100 million for office, apartment and condominium projects at loan-to-cost ratios up to 60%.

Bordenick, a former managing director at New York-based NorthStar Realty Finance, joined Seven Valleys in July to launch the debt platform, as previously reported. He reports to Evan Marks, chief executive of the investment firm.

The firm recently made two hires: originator/underwriter William Berger and Scott Allen, who focuses on development loans. Both are vice presidents. Also supporting the effort is director Marc McGehan, who joined Seven Valleys earlier this year and is focusing on asset management and equity investments.

While the lending staff is small, Bordenick said its process is streamlined so it can move nimbly on deals it finds attractive. “We can move more quickly than many of our competitors,” he said.

Zhang Xin and her husband and co-investor, Pan Shiyi, control SOHO China, which has developed dozens of commercial properties in China over the past two decades.

Seven Valleys owns equity stakes in two New York office buildings: the GM Building, at 767 Fifth Avenue, and Park Avenue Plaza at 55 East 52nd Street. The company also invests in private equity, venture capital, fixed-income products and the energy sector.