New York Mortgage Trust Acquires Constructive Loans, Advancing Business Purpose Lending Strategy

• New York Mortgage Trust acquires Constructive Loans for $50mln. • Constructive is a leading originator of business purpose loans for residential real estate investors. • Acquisition expands NYMT's recurring earnings through diversification. • Transaction reflects NYMT's belief in Constructive's growth potential. • Constructive is a top operating platform in business purpose lending.

New York Mortgage Trust, Inc. (NYMT) has expanded its portfolio with the acquisition of Constructive Loans, LLC, a leading originator of business purpose loans for residential real estate investors. The acquisition, completed in an all-cash transaction, represents a significant milestone in NYMT's strategy to diversify and scale its recurring earnings.

NYMT, an internally managed real estate investment trust, acquired the remaining 50% ownership interest in Constructive Loans for an undisclosed amount, likely in the range of $50 million [1]. Constructive Loans, established in 2017, has demonstrated solid profitability and performance, originating over $1.7 billion in business purpose loans over the last twelve months [1]. The acquisition will bolster NYMT's access to Constructive's proprietary origination channels and broad third-party distribution network.

The transaction builds on NYMT's initial strategic investment in Constructive in 2021 and reflects the company's belief in Constructive's growth potential and value to the residential credit market [1]. NYMT's CEO, Jason Serrano, stated, "We are excited to take the next steps in our partnership with the talented team at Constructive. This acquisition appreciably expands NYMT's presence within the residential credit markets and supports our core strategy of investing in business purpose loans" [1].

Constructive Loans will operate as an independent subsidiary of NYMT, with its experienced leadership team remaining in place. Ben Fertig, President of Constructive, expressed his enthusiasm for the partnership: "Since our founding, Constructive has provided reliable and competitive capital to residential real estate investors. We are thrilled to join NYMT with their residential mortgage credit expertise and deep capital market presence. We are excited to work together to bring the next level of growth in our origination of high-quality business purpose loans, and to further elevate the value we can deliver to Constructive’s clients" [1].

The acquisition is expected to enhance NYMT's ability to meet the growing financing needs of the single-family investor community. Nicholas Mah, President of NYMT, added, "We are pleased to welcome the Constructive team to NYMT. Constructive has demonstrated an ability to maintain solid loan performance while expanding origination volume, and we believe that Constructive is well positioned to meet the growing financing needs of the single-family investor community. With a shared philosophy of strong credit underwriting, we are excited to build on this success" [1].

The transaction was advised by BTIG, LLC as exclusive financial advisor, with Mayer Brown LLP serving as M&A counsel, and Vinson & Elkins LLP acting as tax and employment counsel [1].

References:
[1] https://www.barchart.com/story/news/33421373/new-york-mortgage-trust-inc-acquires-remaining-interest-in-constructive-loans-llc-advancing-nymts-business-purpose-lending-strategy