LA-BASED DEBT FUND EXPANDS REAL ESTATE LENDING OPPORTUNITIES WITH PORTLAND OFFICE
Freedom Financial Funds (“Freedom”), a boutique middle market debt fund based in Calabasas, Calif., has expanded into the Pacific Northwest region. Preston Greene and Eric Shoemaker are leading operations in the Portland, Oregon, office.
With a focus on the broader Northwest — from Sacramento north to Seattle, and east to Salt Lake and Boise — Freedom’s Northwest office provides construction and bridge loans ranging from $3 million to $15 million. According to Shoemaker, Freedom is tapping an important market segment because “many of the bigger debt funds aren’t interested in smaller deals in the smaller MSA’s that make up much of the territory. We like these markets and can be very competitive on complicated and/or time-sensitive deals. We may also be able to offer higher leverage than is typically a fit for other local lenders.”
According to Greene, geographic diversity was the driving force for the company’s expansion into the Northwest market. “We lend in markets and geographies that we know and most often to sponsors with whom we have existing relationships – 80 percent of our annual production is with repeat clients.” As an LA-based fund, Freedom historically conducted most of its business, and raised most of its capital, in Southern California. As the firm continued to grow, diversifying this base became increasingly important. “We made the decision to expand right before the onset of the COVID pandemic – opening satellite offices in Scottsdale and Portland in January 2020…” said Freedom CEO Michael Klein. “Opening new loan production offices in the midst of a pandemic presented plenty of challenges but it also was a great opportunity. Freedom never missed a beat during the second and third quarter when many lenders entirely stopped lending.”
The firm is optimistic about emerging opportunities in the Northwest. According to Greene, “we’re seeing lots of quality deal flow in many smaller markets that get less attention than they should. We really like municipalities like Boise, Vancouver, Tacoma, and the Tri-Cities, as well as Medford, the southern Willamette Valley, and some of the suburban and ex-urban submarkets outside of Portland. We think that long-term, these smaller markets will benefit from their lower cost of living, higher quality of life, and the increasingly distributed nature of the digital workplace. We also like these markets because they tend to be more business-friendly and we are always highly focused on mitigating entitlement risk.”
For sponsors with a strong business plans and proven track records, Freedom’s primary advantage is simplicity, “we pride ourselves on letting clients do what they do best - build successful projects. We make the process straightforward, achievable and always customize our loans to the borrower’s business plan. This approach gives our clients the support they need to execute successfully without worrying about funding risk, over-documentation, or delayed draw requests,” said Greene. “Because our team is small, nimble, and hyper-responsive – direct access to decision makers is immediate and we can adapt quickly to changing circumstances. We believe this value proposition resonates with real estate professionals regardless of the region,” concluded Shoemaker.