• Directed Capital: Non-Conventional Approach to Solving Commercial Real Estate Lending and Investing

    Directed Capital is an opportunistic real estate finance firm that strategically acquires, originates, manages and repositions commercial loans. The firm develops practical, effective loan workout solutions to help borrowers re-access traditional financing channels and provide investors with superior returns uncorrelated with the market. Directed Capital Advisors, LLC is a SEC Registered Investment Advisor (RIA).

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Goldman Bank Boosts Mortgage Lender With Nearly $100 Million in Credit

Directed Capital Resources specializes in distressed loans to
smaller businesses

DC - WSJ - photo

Christopher Moench, chief executive officer of Directed Capital Resources LLC, which has been provided nearly $100 million in credit from Goldman Sach’s Group’s banking arm. PHOTO: SCOTT EELLS/BLOOMBERG NEWS

By: Justin Baer
October 12, 2015

Goldman Sachs Group Inc.’s banking arm has provided nearly $100 million in credit to Directed Capital Resources, refinancing the commercial-mortgage lender’s existing debt and doling out a new credit line.

Goldman Sachs Bank USA, which had provided Directed Capital with a $70 million loan in 2012, refinanced the debt with $58 million. The Wall Street firm’s banking unit also provided the company with a $40 million revolving credit facility, Directed Capital said.

Directed Capital, which specializes in distressed loans to doctors’ offices, retail centers and other small- and mid-sized businesses, has bought more than $1 billion in mortgages since its 2001 founding. The company has raised over $200 million in equity investments, and expects to close on another $100 million funding round in December.

Directed Capital has found a profitable niche in a market fewer U.S. banks are willing to serve amid new rules that have drained their appetite for riskier assets.

“Often we’re there because the banks can’t help them,” said Chris Moench, Directed Capital’s chief executive. “They’re not as flexible on repayment agreements. We figure out how to fix the situation where the bank has sold these assets.”

Goldman’s 2012 loan had funded $300 million in mortgage purchases, Directed Capital said. The company’s mortgages typically range between $1 million and $10 million.

The move reflects Goldman’s increased willingness to use its banking arm to put its own balance sheet to work. The division has grown since the financial crisis, when Goldman and rival Morgan Stanley became bank holding companies to give themselves more flexibility to fund their operations during future downturns.

Goldman Sachs Bank’s assets jumped to $118.2 billion last year from $105.5 billion in 2013. Its loans receivable nearly doubled, to $25.3 billion. Deposits rose to $73.3 billion, from $64.4 billion a year earlier.