FAVO Capital's Strategic Real Estate Move: A Game-Changer for Private Credit Growth

In a bold move to redefine its role in the small and medium-sized business (SMB) finance sector, FAVO Capital, Inc. (OTC: FAVO) has completed a $190 million all-stock acquisition of 1818 Park, a premier Class-A mixed-use property in downtown Hollywood, Florida. This acquisition, finalized on August 13, 2025, marks a pivotal step in FAVO's evolution from a private credit-focused platform to a diversified investment powerhouse. By anchoring its strategy in real estate, FAVO is not only stabilizing its revenue streams but also unlocking new avenues for competitive lending—positioning itself as a compelling long-term investment in an era of economic uncertainty.

The 1818 Park Acquisition: A Pillar of Collateral Strength

1818 Park, located in the heart of Young Circle—a thriving commercial hub in South Florida—boasts a stabilized, income-generating model with high occupancy rates and long-term lease agreements across its residential, office, and retail components. The property's design emphasizes sustainability, walkability, and accessibility, with strong anchor tenants and proximity to major highways and public transit. These attributes translate to predictable cash flows, a critical factor for lenders seeking reliable collateral.

For FAVO, the acquisition adds a high-quality real estate asset to its portfolio, directly enhancing its collateral base. This is no small feat: in private credit markets, the strength of collateral determines the terms of financing. By securing a property with durable cash flows and low vacancy risk, FAVO can negotiate more favorable interest rates and larger loan facilities. This, in turn, amplifies its capacity to fund SMBs—its core mission—while reducing exposure to market volatility.

Diversification as a Strategic Imperative

FAVO's leadership has long emphasized the importance of diversification. The acquisition of 1818 Park aligns with this vision by balancing the company's exposure to private credit with the stability of real estate. As Chief Financial Officer Vaughan Korte noted, the property's income streams “directly support the growth of FAVO's private credit operations by enhancing the quality of collateral used in financing negotiations.” This dual-asset strategy creates a flywheel effect: stronger collateral enables more aggressive lending, which fuels revenue growth and further collateral diversification.

The partnership with GCF Development, the original owner of 1818 Park, adds another layer of strategic value. By becoming long-term equity partners in FAVO, GCF ensures operational continuity and aligns incentives across stakeholders. This collaboration mitigates execution risk and reinforces FAVO's credibility in the real estate sector—a critical factor for attracting institutional capital.

Unlocking Competitive Financing for SMBs

The acquisition's most profound impact lies in its ability to scale FAVO's private credit business. With a robust collateral base, FAVO can now access larger, more competitive financing lines, enabling it to offer SMBs better terms—lower interest rates, extended repayment periods, and tailored solutions. In a market where traditional banks remain cautious, FAVO's enhanced liquidity positions it as a vital alternative lender.

Chief Strategy Officer Glen Steward underscored this point, stating that the move is a “natural extension of FAVO's vision to build a resilient, diversified investment platform.” By combining the predictability of real estate with the agility of private credit, FAVO is creating a hybrid model that thrives across market cycles. This resilience is particularly attractive to investors seeking long-term value in an era of economic fragmentation.

A Compelling Investment Thesis

FAVO's strategic pivot to real estate is not just a defensive move—it's a calculated offensive play. The company's ability to leverage high-quality assets to expand its lending capacity creates a virtuous cycle of growth. For investors, this translates to a stock with dual drivers: the appreciation of real estate holdings and the compounding returns from a scalable private credit business.

Moreover, the acquisition aligns with broader macroeconomic trends. As SMBs increasingly seek non-traditional financing, and real estate markets stabilize post-pandemic, FAVO is uniquely positioned to capitalize on both. The company's transparent financial strategy—highlighted by its focus on durable cash flows and stakeholder alignment—further strengthens its appeal.

Conclusion: A Long-Term Bet on Resilience

FAVO Capital's acquisition of 1818 Park is more than a real estate play; it's a masterstroke in building a resilient, diversified platform for private credit growth. By anchoring its strategy in stabilized assets and strategic partnerships, FAVO is not only fortifying its balance sheet but also empowering SMBs to thrive in a challenging economic landscape. For investors, this represents a rare opportunity to back a company that is redefining its industry while delivering sustainable returns.

In a market where agility and adaptability are paramount, FAVO's dual-asset model offers a blueprint for long-term success. As the company continues to scale its operations, the value of 1818 Park—and the broader vision it represents—will likely become a cornerstone of its growth story.