Ready Capital Corp. (NYSE:RC) has acquired affordable housing finance firm Red Stone and its affiliates.
Red Stone's management team, led by John Sokolovic, and all employees have joined Ready Capital, a real estate finance company that originates, acquires, finances, and services commercial loans.
Ready Capital acquired the entities through which Red Stone conducts its affordable housing finance business in exchange for cash and stock as well as the assumption of certain Red Stone guarantees of secured indebtedness, announced the firm.
The acquisition further diversifies Ready Capital’s business and represents its commitment to affordable housing, said company leaders.
“Affordable housing finance presents a significant growth opportunity that will benefit our shareholders by expanding our presence in a sector with low correlation to our other businesses,” said Tom Capasse, chairman and CEO of Ready Capital. “Moreover, the team at Red Stone has enormous talent, and we look forward to building on their success collaboratively in the future.”
Red Stone, which many also know as Red Stone Tax Exempt Funding, has focused on providing acquisition, development period, and permanent mortgage capital on properties that are financed utilizing tax-exempt and taxable bonds.
“We are very proud of our team’s achievements not only in providing exceptional financial products to our clients but also our team’s dedication and commitment toward the production of much-needed affordable housing throughout the United States,” said Sokolovic. “By joining the team at Ready Capital, we are confident that we can continue to grow and serve our clients, financial partners, and the affordable housing community while adding value for Ready Capital's shareholders.”
Red Stone Equity Partners, a low-income housing tax credit syndicator, is a separate company and is not involved in the transaction.
Ready Capital received financial advice on the deal from Houlihan Lokey and legal advice from Clifford Chance US. Red Stone received financial advice on the transaction from Riparian Partners and legal advice from Jones Day.
Ready Capital specializes in loans backed by commercial real estate, including agency multifamily, investor, and bridge as well as SBA 7(a) business loans. Headquartered in New York, Ready Capital employs over 500 lending professionals nationwide.
Since its founding in 2002, Red Stone has provided in excess of $4.6 billion of mortgage debt and equity capital used to finance 63,032 apartment units in affordable and mixed-income rental properties.
