Civic, FoA Commercial acquirer starts business-purpose loan REIT

Roc Capital Holdings has teamed up with Temasek, a Singapore-based company, to create a real estate investment trust to invest in business-purpose loans.

The new REIT, Roc360 Real Estate Income Trust, will invest in loans primarily originated by Roc Capital, which does business under the name Roc360. Terms of the agreement were not disclosed.

The Roc360 REIT is a natural extension of what the company already does, said Maksim Stavinsky, president of Roc360.

In March it acquired Finance of America Commercial as the holding company paired back much of its business to concentrate on reverse mortgages.

In May, Roc360 purchased the origination assets, but did not necessarily bring on the employees of, Civic Financial Services from PacWest Bancorp, to add to its existing business purpose lending line.

Between the acquisitions and Roc360's own organic expansion, "our volumes have grown and continue to grow and so as they do, we look for more and more diversified capital that can handle size," Stavinsky said.

Besides its own brand, the company also originates under Civic Financial Services by Roc360 and Finance of America Commercial by Roc360.

PacWest purchased Civic in February 2021, and retained its management as it looked to increase its presence in business-purpose lending.

But almost two years later, a new management team at PacWest fired Civic founder William Tessar and ended the "hands off" relationship. Several months later, PacWest sold Civic to Roc360.

REIT structures have been used in the private-label securitization area to allow for aggregation of loans to package into deals.

"As demand for our assets has increased, we view the Roc360 REIT as an opportunity to secure more funding for our customers by diversifying our range of capital sources," said Arvind Raghunathan, Roc360 CEO. "We are honored to partner with Temasek on this important endeavor, which will have a beneficial impact on our customers' ability to scale their businesses in combating the shortage of affordable, energy efficient homes in this country."

Deutsche Bank Securities served as structuring agent for the transaction.