On Feb. 17, 2016, Bauhouse filed a suit seeking a preliminary injunction to stop the foreclosure sale. Insiders at AFC Gamma own 28.0% of the company. Acreage has one of those prized licenses, and we're looking forward to helping them continue building it out. But the good news is, if China invades Taiwan, there is a way to protect yourself. In its suit against the Pilevskys, Gamma said that the delay allowed groups like the East River Fifties Alliance (ERFA) to organize against its development. . SUITE 1770, WEST PALM BEACH FL, 33401. Again, serving on two related boards concurrently doesnt violate the requirements of an independent director. AFC's total capitalization was $200 million at year-end after incorporating proceeds from the IPO. Mr. Kalikow is a graduate of the Wharton School of Business with degrees in Real Estate and Finance. It comprised a $145. Invision. To summarize the analysis of the board, the CEO is chairman. institutional investment and operational due diligence for the last decade. The rest are likely or highly likely to be disproportionately influenced by the CEO due to past or ongoing outside business relationships. Based on her biography, Robyn's career started in 2007. While the war ensued in the Downtown courtroom, another battle was flaring up with 3 Suttons zoning approvals. The companies were formed over a five year period with the most recent being incorporated three years ago in February of 2019. The suit also notes that another Pilevsky, Jordan, is a partner at said law firm. But thats not all. David Ingles and Yvonne Man bring you the latest news and analysis to get you ready for the trading day. This competition will drive down interest rates and attract borrowers like MSOs. Investors could realistically see a double or triple on their principal while earning a 6%-9% cash yield. The company was incorporated in Florida two months ago. Looking to the future, though, if the SAFE Banking Act passes, we could see an influx of institutional capital that would increase competition amongst cannabis-specific and mainstream lenders. I am not receiving compensation for it (other than from Seeking Alpha). Has the Foundation made any headway this year to support local communities? A New Cannabis Dating Service Might Solve Your Financial Needs, Golf Odds, Picks And Props: 2023 Arnold Palmer Invitational Betting Preview, Most GOP Voters Support Weed Legalization, Says New Poll, Advanced Flower Capital Gamma (AFC Gamma). One day later, Gamma sent Bauhouse notices of maturity defaults as well as a notice that it would conduct a foreclosure sale of the collateral the following month. But, despite his past, he's not optimistic about. Dr. Jonathan Eisenstat testifies during Alex Murdaugh's double-murder trial at the Colleton County Courthouse in Walterboro, South Carolina, on Feb. 27, 2023. Im sure itll be successful because there are a lot of powerful people involved who are smarter than me, but I dont see us building new tunnels or bridges or subway lines any time soon., I tend to be a very under-the-radar person, Kalikow explained. And tell me more about your approach to lending, what do you look out for and why? Additionally, AFC Gamma has a credit line of up to $40 million, providing the REIT with approximately $120 million of capacity to lend to cannabis operators. Gamma has originated billions of dollars of loans on hundreds of properties over the past half-century. The fact of the matter is, lawsuits cost a lot of money. Five of those six were trying to assess my strength and desire to hold itto see if they can get in at a cheap price.. It has committed to lending another $30 million to existing borrowers and to two new borrowers, according to the release. There, he invested across industries and asset classes on behalf of institutions, family offices, and wealthy individuals as a proprietary trader at Morgan Stanley and then as a hedge fund portfolio manager and trader at various funds and firms. Mr. Kalikow owns 97,500 shares of AFC Gamma stock worth more than $1,520,025 as of March 1st. Jonathan Kalikow Overview Jonathan Kalikow has been associated with four companies, according to public records. Is this an April Fools Day joke? . Mr. Kalikow is a graduate of the Wharton School of Business with degrees in Real Estate and Finance. Robert Levy, another independent director, has substantial experience in retail and multifamily commercial real estate. LT: We have not currently made any loans to operators in California, Washington, Oregon or Oklahoma. Od czasu swojego debiutu, Property Brothers konsekwentnie zaliczaj si do najlepszych programw do majsterkowania na . The proposalbrought forth in January 2016would ban commercial development between East 52nd and 59th Streets east of First Avenue and cap the height of new structures at 260 feet. We decided to share a few more details on this analysis than we usually since its a great case study for subscribers to learn from. Originating senior secured loans to companies in the cannabis industry is its primary activity helping to finance land or buildings, equipment, licenses, and "other assets" that classify as colleterial to secure AFC's loans. The board of directors, meanwhile is led by Leonard M. Tannenbaum. This article was coproduced with Williams Equity Research (WER). I was on the stand for seven hours, Kalikow said. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps. Long-term, we would like to benefit the states that our borrowers operate in. While not necessarily unusual, this potentially augments Leonard's already powerful decision-making ability even further. Youre not winning this one.. This is the entire management team provided on Fifth Street's website, another company founded by Tannenbaum. What is the teams strategy for building a diverse portfolio? There, he invested across industries and asset classes on behalf of institutions, family offices, and wealthy individuals as a proprietary trader at Morgan Stanley and then as a hedge fund portfolio manager and trader at various funds and firms. New York City . To build the cloud-piercing tower he envisioned, Beninati would have to buy those buildings (for $32 million), empty them of their rental tenants, demolish them and buy 267,000 square feet of air rights from other properties. So we look at diversity on a step-by-step basis rather than a borrower-by-borrower basis. Kalikow, the 47-year-old married father of four girls ages 8, 10, 12 and 17, is the president of Gamma Real Estate and a man of real estate pedigree par excellence. Pennsylvania Senators also discussed the potential for recreational for the first time at a GOP-led committee hearing in February. We tend to lend to operators in regulatory-friendly states, such as: Ohio, Pennsylvania, New York, New Jersey, Maryland, Massachusetts, Arizona, New Mexico, Missouri, Illinois, Michigan, and Nevada. Kalikow, the 47-year-old married father of four girls ages 8, 10, 12 and 17, is the president of Gamma Real Estate and a man of real estate pedigree par excellence. In the last twelve months, AFC Gamma insiders bought shares 5 times. They purchased a total of 87,783 shares worth more than $1,380,633.40. Jonathan Kalikow. It was not a threat; it was a specific explanation of the fact that I had hoped that we could work together., One of the ways Kalikow believes Kallos followed through on what he thought was a threat was through the communitys increased use of 311 calls this past summer, specifically around the Fourth of July weekend, which invited greater scrutiny on the site. Serial poda za duetem, ktry poszukuje, negocjuje, kupuje i odnawia zniszczone domy w imieniu klientw. While we strongly prefer internal management, having the opposite doesnt mean we automatically ignore a company. Another was that my father remarked to one of the borrowers that he liked his pen, and they said that showed the closeness of the relationshipI shit you not. Learn More on Jonathan Gilbert Kalikow's trading history. Beninati had a different perspective, describing Gammas role as active in court documents, saying that the lender demanded that the developers make dozens of changes to the project design, implementation and construction. India FM Jaishankar says Soros dangerous, debate needed on democracy, Buffett's Berkshire profit falls on investments, currencies, Bill Gates buys Heineken stake, despite saying he's 'not a big beer drinker', Elon Musk recruits team to develop OpenAI rival - The Information, Musk donated around $1.95 billion in Tesla shares last year, Hedge fund manager Chris Hohn demands Airbus drop Atos deal - letter, Elon Musk's challenge: Stay ahead of the competition, ISS urges Apple shareholders to vote for CEO Tim Cook, other execs' pay packages, Elon Musk accuses media of racism after newspapers drop 'Dilbert' cartoon, French media billionaire Niel fails with bid for TNT television frequence - Arcom. Thats when it announced: AFC Gamma completed a first close of its $200 million investment vehicle, having raised approximately $80 million of equity from over 20 large family offices. It yields 8.3% despite more than doubling in price in the past 12 months from $6.67 to $16.16. After some further analysis, I realized there was a void in the cannabis market as there was no institutional lender, and capital was only being provided by sale-leasebacks or family offices. Termination fees are another point of contention. We knew it would provide us with a great head start and the ability to have the best cost of capital in the industry, which allows us to be competitive on pricing with our borrowers. Three to four months before the second loan matured, Beninati told Kalikow he had three potential buyers lined up for 3 Sutton Place with one lead candidate. In many ways, its approach is in between that of a Business Development Company and mREIT. So the emergence of an mREIT like AFC Gamma (NASDAQ:AFCG) is invaluable. Coupled with its other financial resources, it's sufficient to achieve a diversified portfolio capable of demonstrating AFCs abilities. In return for the apartments, plus $150,000 in cash, the lawsuit alleges that the Pilevskys received an indirect equity interest. This brings us to an important point: Recent daily trading volumes average less than 25,000 shares. My family is in real estate, and everyone in the real estate business likes to have the press. Jonathan specializes in catalyst-driven markets with high barriers to entry, which he now applies to Gammas nationwide opportunistic real estate investment and hard money lending strategies. We also talked to them about the fact that the rezoning we were proposing would actually give them additional floor area ratio on sitethat wasnt on site and already therein order to build affordable housing. 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But, according to the post-trial memo, Inbursa backed out a week later because, the bank claimed, the value of the collateral would not be sufficient to satisfy its 45 percent LTV requirement. This is impressive since the company didn't exist a year ago. It generated $5.25 million in revenue from July 31 through December 31. AFC Gamma executed an IPO on March 19, 2021. The company seeks to work with operators, ideally in limited license states. According to glassdoor.com, a Hollywood actor's average yearly salary in the United States is $35,550. There were so many little fights during this war. In July 2020, a mortgage REIT (mREIT) was founded to: " originate, structure, underwrite, and manage senior secured loans and other types of loans for established companies operating in the cannabis industry in states that have legalized medicinal and/or adult use cannabis.". I offered them options such as using their air rights in other parts of the city, Kallos added. Jonathan Kalikow and Leonard Tannenbaum AFC Gamma, a West Palm Beach-based real estate investment trust, now has $120 million in capital on hand to lend to cannabis operators. I surmise that [Pilevsky] was introduced to Joe, who told him, Woe is me, I dont want to lose my baby, Kalikow said. I wrote this article myself, and it expresses my own opinions. Our platform includes a publicly-traded company, a private BDC and a network of Family Offices that allows us capacity to support portfolio companies over long periods of time. But he met with us, and it was clear that he did not intend to make the sale.. AFC Gamma works with cannabis companies nationwide. This chart shows Jonathan Gilbert Kalikow's buying and selling at AFC Gamma by year and by quarter. Its lowest cash interest rate charged is 12%; the highest is 16%. The WMR brands include: (1) iREIT on Alpha (Seeking Alpha), and (2) The Dividend Kings (Seeking Alpha), and (3) Wide Moat Research. in the cannabis industry in states that have legalized medicinal and/or adult use cannabis.". We like the state of Arizona. Mr. Kalikow is also Member of New York State Bar Association and Director & Head-Real Estate at. They changed the bankruptcy law for real estate in 2005 to say that if youre a single real estate asset its a faster trackso, you as the developer cant tactically declare bankruptcy and indefinitely hold up your lender, Kalikow explained. But before getting there, its worth examining the origins. This is clearly an extremely speculative play. As of the date of the S-11 filing associated with the IPO, AFCG had a sizeable $5.5 billion loan pipeline. ), Beninati, on the other hand, claimed that it was Gamma that made unreasonable demands around a potential sale in the companys Chapter 11 disclosure statement; he attempted to reach a resolution with Gamma to ensure that creditors were paid, but Gamma demanded it be paid almost $50 million more than it was owed before creditors would be paid.. This net worth approximation does not reflect any other assets that Mr. Kalikow may own. From a cash flow perspective, our best estimate is that AFC generated $2.87 million over the period, or about $7 million annualized. Prior to co-founding Gamma Real Estate, Jonathan Kalikow spent 18 years on Wall Street investing across industries and asset classes as a proprietary trader at Morgan Stanley and then as a hedge fund trader and portfolio manager. 220 E 72nd St #16D, New York, NY 10021, lived here in 2019 $3,040: C. 350 Madison Ave, New York, NY 10017, lived here in 2013 $3,040: D. And, with few exceptions, companies involved are heavily excluded from the financial system. There are parts of this deal that made a lot of sense to us.. ), I am proud of it, Kallos responded cheerfully to Kalikows accusation that he urged residents to call 311. The Sovereign has taken the laboring oar, no doubt, but there are many buildings that have contributed substantially., One would assume that some of the shine would come off 3 Sutton Place amid the war raging around it, but Kalikow isnt walking away. The spokesman also said that after the stop-work order was issued, workers were allowed to remediate the inefficient underpinning of a neighboring building and make the site safe, but that no other construction work was allowed. So the portfolio isn't as robust in a rising interest-rate environment. Half of the 26 counts were dropped before the trial, and over five days of hearings last November, the Southern District of New Yorks bankruptcy court held a trial regarding the remaining claims. Oh, and there was a bankruptcy filing in between. We don't just want to be there for the company's first financing. On the other hand, we also have other vehicles that don't necessarily need real estate as collateral. As an institutional lender, we provide financial solutions to the cannabis industry. As of February 15, theyve also reviewed 273 loans, 10 of which were funded; entered into non-binding term sheets for five more; began a syndication commitment letter for another; and were in the process of evaluating 23. LT: Exactly right, cannabis companies, no matter the size, traditionally lack the lending opportunities that other enterprises have available, and that's where AFC Gamma comes in. I wrote this article myself, and it expresses my own opinions. The legal relationship between the general partner, limited partner, and investment offering itself detailed, to say the least. Mr. Harrison is currently Senior Operating Partner at Merida Capital Partners, "a private equity firm specializing in the cannabis ecosystem.". AFC Gamma seeks to work with operators, preferably in limited license states. Anything you build thats residential proximateis going to be expensive. Are there any notable success stories that resulted from your funding? Everything depends on management's creativity, flexibility, and ability to execute. The only other challenge is going to be that as capital comes back, we're going to have to either refinance those existing borrowers or deploy capital. Jonathan Roumie is drinking coffee. That's considerably lower than the likes of Blackstone Mortgage Trust and Starwood Property Trust's (STWD) ~8% yields the two commercial mREIT heavyweights. Every day I get complaints from residents about construction noise. So, to make things even easier we said [to Beninati] wed give him back all of his cash invested in the property, and if we sold the property within a year, wed give him 20 or 25 percent above a threshold so he could retain a portion. ERFA President Alan Kersh responded to Kalikows assertion by saying, Together, [ERFA] building owners and city residents have reached into their pockets and donated funds to support our rezoning efforts. RT: AFC Gamma is a commercial mortgage REIT. Above that threshold, the manager receives 20% of core earnings, with a few strings attached. We want to be there for the company's second and third financing. Heis also the editor of The Forbes Real Estate Investor., Thomas has also been featured in Barron's, Forbes Magazine, Kiplingers, US News & World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox., He is the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 (based on page views) and has over 106,000 followers (on Seeking Alpha). Each loan is unique and tailored specifically to meet the needs of our borrowers. Moreover, he has valuable experience in marketing and consulting that will likely benefit AFC. If you can't find at least a few really good and bad aspects of a new company especially in a new and controversial industry, you probably aren't looking hard enough. We uncovered Leonard and Robyn's wedding registry dated November 23, 2019. Then theres partner and head of real estate Jonathan Kalikow, and Thomas Geoffroy, CFO. And that's the point where things start looking quite attractive for AFC. We understood [Beninatis] shortcomings but we saw a lot of embedded value, Kalikow said. Awards. And while its lower than its previous high, it remains roughly 10% higher than its initial $19.0 price. 5. Are there specific deals the team tends to focus on more? We understood [Beninatis] shortcomings but we saw a lot of embedded value, Kalikow said. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Actor. It's not zero, but still. But imagine the combination of near total lack of competition and immense opportunity set. It had no debt at that time but did maintain a $40 million line of credit. We really like the state of Ohio as the market continues to be ripe for cannabis operators since its a limited license state. Learn More on AFC Gamma's active insiders. Please don't hesitate to contact us and let us know how we can assist. Founder of Gamma Real Estate Capital Management, Inc., Jonathan Kalikow is President at this company. Amy D Scott Jonathan G Kalikow. Len Tannenbaum: When I was 27, I founded Fifth Street, a finance company specializing in raising funds from private investors and investing in middle-market companies. We are different from other lenders in two significant ways. Suppose the Senate passes the SAFE Banking Act this go-around, which I believe they will, lenders, including AFC Gamma, will be able to borrow cheaper, which will, in turn, allow lenders to lend cheaper. Just last month, AFC Gamma successfully sold 6.25 million shares of common stock at $19 per share. Markets never sleep, and neither does Bloomberg. It primarily originates loans structured as senior loans secured by real estate, equipment, and licenses and/or other assets of the loan parties to the extent permitted by applicable laws and the regulations governing such loan parties. RT: We're excited about New York, although there is some work to do. JB: Can you provide an overview of your investment portfolio and explain what types of companies AFC Gamma tends to work with? But, its 3 Sutton Place that has been the subject of the most industry chatter (and headaches for Kalikow) over the past couple of years, and the embattled property isnt out of the woods yet. This unique partnership approach with each of our clients allows us to find solutions to help them expand and grow alongside them. Photo: Sasha Maslov/for Commercial Observer, I believe in completely disproportionate retaliation, Jonathan Kalikow told Commercial Observer, like, Kalikow, the 47-year-old married father of four girls ages 8, 10, 12 and 17, is the president of, Still, Gamma Real Estate nevertheless found itself embroiled in a real estate battle and forced into the spotlight after it financed, The Kalikows arent exactly wet behind the ears when it comes to real estate lending. But the community was up in arms long before Gamma took over the property. Prior to co-founding Gamma, Jonathan Kalikow spent 18 years on Wall Street. The second way we are different is we, as the first NASDAQ-listed lender and the leading lender in the cannabis industry, have a considerable hold size where we will hold the majority of the loan versus syndicating them. Its like a bunch of seventh graders picking a fight with a Navy Seal platoon. Photo by pcess609/iStock via Getty Images. Cannabis is a local business, where the operators become entrenched in the local communities providing jobs and revenue to the states. Kalikow and Co. And as we sat down with him for lunch at the 101 Club, we got the sense that he doesnt pull punches. They just need avoid certain types of relationships for at least three years. The Kalikows arent exactly wet behind the ears when it comes to real estate lending. Banco Inbursa was one of the first lenders out of the gate, entering into negotiations for the projects financing and executing a term sheet for a $70 million loan. But it will take time to build that out, get the market set up and have some of the regulations probably become more favorable. Fortunately, WER's expertise is in the private institutional space. Jonathan Gilbert Kalikow has not been actively trading shares of AFC Gamma during the past quarter. RT: Given our focus on limited license states, our two favorite medical markets, aside from Florida, currently are Ohio and Pennsylvania. Their experience seems at least sufficient for their roles. Bauhouse also alleged that Gamma had a different motivation than a traditional lender and seized greater control by refusing to fund the project in accordance with loan documents. Once Jonathan was on board, Len and I built AFC Gamma from the ground up at home during the height of the pandemic lockdown. Because of this, our expectations surrounding AFCG's pipeline and margins directly correlate with estimates of its fair value. AFC Gamma, Inc. originates, structures, underwrites, and invests in senior secured loans, and other types of loans and debt securities for established companies operating in the cannabis industry in states that have legalized medicinal and/or adult use cannabis. Jonathan Kalikow President Gamma Real Estate. He also holds a JD from Fordham University School of Law and is a member of the New York State Bar Association. Bauhouse Group likely will not see any proceeds from sale of controversial East Side site This broader mandate means we must have greater confidence in its underwriting standards and practices and in its management. AFC Gamma, a West Palm Beach-based real estate investment trust, now has $120 million in capital on hand to lend to cannabis operators. It will be a net positive for all operators. Its a pain. Learn More on AFC Gamma's active insiders. Since we underwrite loans based on three pillars: cash flows, licenses and real estate, it doesn't make sense for us to focus our efforts in those states. It engages in cash-flow lending like a BDC but incorporates its borrowers real estate value like an mREIT. He asked, What sell-out price are you using? and we replied, $4,000 a foot. He said, What if you use $7,000 a foot? We said that if you use $7,000 a foot you probably make half a billion dollars. And of the four directors classified as independent, one worked under said CEO as recently as 2017. Between courses, he opined on some of New York Citys most buzzed-about projects: I like the Related [Companies] guys as individuals a lot, I really do, Kalikow said, but I dont really understand Hudson Yards. There are 4 older executives and no younger executives at AFC Gamma. The oldest executive at AFC Gamma is Mr. James F. Velgot, Chief Marketing Officer, who is 61 years old. The company was purchased by Cresco for $213 million a year later after we financed them. There's no perfect solution to this conundrum except to avoid externally managed companies. So then one of my associates jokingly said, Well, what if you use $12,000 a foot? Joe runs the numbers and says, Oh my god. (Beninati, officials at Bauhouse Group and their legal counsel never returned COs requests for comment. Prior to co-founding Gamma, Jonathan Kalikow spent 18 years on Wall Street. "I love Jesus and it is the honor of my life to get to portray him," he said. The third tier is smaller operators. The interference made it difficult for Kulick to do his job, and he came. We believe Ohio may go recreational soon, but we have enjoyed supporting that medical market. We made one loan then we made a second loan to complete the purchase. Gamma provided an 18-month loan that then was refinanced with a seven-month, $147 million loan in June 2015. At the same time, management indicated there were $561.8 million of potential loans under review. Jonathan specializes in catalyst-driven markets with high barriers to entry, which he now applies to Gamma's nationwide opportunistic real estate investment and hard money lending strategies. There, he invested across industries and asset classes on behalf of institutions, family offices, and wealthy individuals as a proprietary trader at Morgan Stanley and then as a hedge fund portfolio manager and trader at various funds and firms. Given its especially profitable, high-interest rate loans even somewhat expensive leverage will create a spread of at least 500 basis points and potentially 800-900. In July 2016, Beninati brought a 26-count lawsuit against Gamma, alleging improper conduct and that Gamma breached contracts between the two parties. The lead director is affiliated rather than independent and appears to have a very close business relationship with the CEO. So he understands the layers of complexity involved. Simply put, its legally owed previously paid incentive fees to the external manager if adjusted capital isn't at least 7% higher than the end of the previous fiscal year. Especially when theres so little actual history to work with.
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