Arzan Wealth (DIFC), a Dubai-based consulting firm governed by the Dubai Financial Services Authority, has announced that it had successfully exited a mezzanine lending transaction in US, fetching solid returns to its investors.
The investment was entered into in October 2020 as part of Arzan Wealth’s debt platform, utilising the Real Estate Index Linked Securities (REILS) structure, which was designed as a six-year amortizing mezzanine loan to a portfolio of 272 single family rental (SFR) homes in Baltimore, Maryland.
In December 2021, the sponsor had acquired a second portfolio of 217 stabilized residential units in Baltimore, thus adding more collateral to the loan and reducing the risk profile of the investment.
The transaction was structured with an expected net 8.25% coupon, payable quarterly, plus regular amortization.
“Based on the level of inflation, we expected a net IRR of between 10% and 13% at underwriting,” stated Muhannad Abulhasan, CEO of Arzan Wealth.
“But we are pleased to announce that upon the recent exit of this loan, the actual IRR achieved and delivered to investors was 13.1%, with a net return multiple of 1.3x,” he added.
Arzan Wealth currently advises various professional clients on real estate, private equity, and other investments with a total value of assets advised around $2.55 billion.
It focuses on arranging yielding investments in major global markets, as well as bespoke investments.
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