Apparent Capital and Base Equities are excited to announce the formation of Apparent-Base Structured Finance, a strategic partnership designed to provide middle-market preferred equity and mezzanine debt to sponsors in need of capital that will complement their targeted capital stacks. At the same time, the platform also offers investors access to this highly attractive and underserved segment of the mezzanine finance market.
In the current capital markets environment, characterized by tight credit conditions and elevated interest rates, fewer options exist for sponsors seeking small-balance ($1-7MM) preferred equity or mezzanine debt capital. Apparent-Base Structured Finance is positioned to fill this gap, while providing investors with opportunities for strong immediate cash-on-cash yields and overall equity-level compounded returns, with debt-like downside protection. Preferred equity and other structured finance products also offer investors priority and enhanced protections when compared to common equity positions.
Our combined platform team brings decades of successful investment experience in deal sourcing, underwriting, structuring, and asset management. We invest via preferred equity or mezzanine debt into cash-flowing real estate across the housing, industrial, and retail sectors, seeking to carefully curate a portfolio of structured finance opportunities for our strategic capital partners.
Apparent-Base Structured Finance is one of the few approved allocators to provide preferred equity behind agency debt. Since May 2022, Base Equities has originated over $32 million in small balance preferred equity, JV, B-Note, and mezzanine loans, with a projected average gross IRR of 18%+. The partners saw a pipeline of over $2 billion in preferred equity and mezzanine debt across 500+ deals in 2023 and demand has continued to accelerate in 2024. This robust demand underscores the attractiveness and relevance of our capital solutions in the current market.
Key Benefits of Apparent Base Structured Finance:
- Underserved Market Sector
The small-balance preferred equity/mezzanine debt market falls under the radar of most institutions allocating capital to the CRE space, with few participants/competitors. This presents a significant opportunity for Apparent Base Structured Finance to become a dominant player and creates an environment with enhanced potential for outsized returns. - Strong Existing Demand
In 2023, the partners saw over $2 billion in preferred equity and mezzanine debt opportunities across 500+ deals, Given the current state of the capital markets and commercial real estate fundamentals, this demand is expected to exist for at least the next 24-36 months. - Credibility and Track Record
Apparent-Base Structured Finance is one of the few approved allocators to provide preferred equity behind agency debt. The partnership has navigated the challenge of structuring investments behind Freddie and Fannie, allowing a broader swath of sponsors and borrowers to access our capital, without adding additional complexity to their closing. - Curated Portfolio of Cash-Flowing Opportunities
We invest via preferred equity or mezzanine debt into cash-flowing real estate across the housing, industrial, and retail sectors. Our goal is to develop a portfolio of the very best risk-adjusted opportunities that cross our desk, providing attractive current yields and upside. - Superior Risk-Adjusted Structure
Preferred equity offers investors a share of the upside and priority over common equity positions, providing the opportunity for both strong returns and enhanced security. Given the high volume of deal flow we see, we remain highly disciplined, using our capital not only to garner strong investment terms but also to significantly enhance our structure from a risk-management perspective.
For more information about this new platform, please contact Dan Joseph: Dan@apparentcapital.com.
About the Partners
Apparent Capital: Managed by Corridor Ventures, Apparent Capital is a highly diversified, opportunistic CRE investment vehicle with a 20+ year track record of outperformance. Founded by Dan Joseph and Hagan Brown, Apparent Capital seeks to compound its capital over a long-term investment horizon.
Base Equities: Founded by veterans in the small balance/middle market real estate spectrum, Base Equities focuses on preferred equity and mezzanine debt placement. With extensive experience in real estate sponsorship and operations, Base Equities principals have acquired over $350M of real estate and originated nearly $1B of real estate debt on transactions nationwide.
Disclaimer
The information contained herein is provided for informational and discussion purposes only and is not, and may not, be relied on in any manner as legal, business, financial, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in the investment described herein (the “Investment”), or to participate in any trading strategy. A private offering of interests in the Investment will only be made pursuant to the Investment’s offering materials, including the Investment’s subscription documents (the “Subscription Materials”), which will be furnished to qualified investors on a confidential basis at their request for their consideration in connection with such offering. The information contained herein will be superseded by, and is qualified in its entirety by reference to, the Subscription Materials. To the extent that there is any inconsistency between this document and the Subscription Materials, the provisions of the Subscription Materials shall prevail. No person has been authorized to make any statement concerning the Investment other than as set forth in the Subscription Materials and any such statements, if made, may not be relied upon. The information contained herein must be kept strictly confidential and may not be reproduced or redistributed in any format without the approval of Apparent Capital, LLC and Base Equities, LLC, Delaware limited liability companies and the Sponsors of the Investment (the “Sponsors”). By accepting this document, the recipient agrees that it will, and it will cause its shareholders, partners, members, directors, officers, employees and representatives, to use the information only to evaluate its potential interest in the securities described herein and for no other purpose and will not divulge any such information to any other party except for its advisors under duties of confidentiality. By accepting this document, each recipient agrees to return it promptly upon request. The Sponsors are the sole sponsors of the offering of interests in the Investment. The interests in the Investment are subject to restrictions on transferability contained in the Subscription Materials. Neither the Sponsors nor any of their affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein and nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance. No representations are made as to the accuracy of any targets, estimates, approximations or projections or that such targets, estimates, approximations or projections will be realized. Forward-looking statements are based upon certain assumptions and information available on the date hereof. Actual events are difficult to predict and may be beyond the Sponsors’ control. The information contained herein does not purport to contain all of the information that may be required to evaluate an investment in the Investment and any recipient of this document is encouraged to read the Subscription Materials and should conduct its own independent analysis of the data referred to herein prior to making an investment in the Investment.
This material includes “forward-looking statements.” Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” “may,” “will,” “should,” “would,” “could,” “continue,” “future,” “seem,” “potential,” “predict” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical facts or matters. Such forward-looking statements include projected financial information. Such forward-looking statements with respect to revenues, earnings, performance, returns, strategies, prospects or other aspects of the Investment and/or the business of Apparent Capital, LLC and Base Equities, LLC, including, but not limited to, real estate projects or investments, are based on various assumptions, whether or not identified in this presentation and on current expectations that are subject to risks and uncertainties. A number of risks or uncertainties could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. Accordingly, forward-looking statements, including any projected financial information, should not be viewed as factual and should not be relied upon as an accurate projection of future results. Should one or more of these risks or uncertainties materialize, or should any of the related assumptions prove incorrect, actual results may vary in material respects from those projected in such forward-looking statements. Apparent Capital, LLC and Base Equities, LLC undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Accordingly, you should not place undue reliance on such forward-looking statements.
Prior to the sale of interests in the Investment, the Sponsors will give investors the opportunity to ask questions and receive answers concerning the terms and conditions of an investment in the Investment and other relevant matters and to obtain any additional information (to the extent that the Sponsors possess such information or can obtain it without unreasonable effort or expense) necessary to verify the accuracy of the information in this document. Each prospective investor should consult its own attorney, business adviser and tax adviser as to legal, business, tax and related matters concerning the information contained herein including the merits and risks involved with an investment in the Investment. The Investment involves a high degree of risk. Participation in the Investment is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in an investment in the Investment. Investors in the Investment must be prepared to bear such risks for an indefinite period of time. No assurance can be given that the Investment’s objectives will be achieved or that investors will receive a return of their capital. There will be no public market for interests in the Investment, and interests in the Investment will be subject to strict limitations on transfer. Investors should regard their interests as illiquid, and investors should not invest in the Investment unless they are prepared to lose all or a substantial portion of their investment.
The Apparent Capital and Base Equities logos appearing in these materials are trademarks owned by Apparent Capital, LLC and Base Equities, LLC which have been licensed to the Sponsors solely for use in connection with the Investment.
The names and logos of unaffiliated third-parties are used for example purposes only and no such party is sponsoring or endorsing the Investment.
Apparent Capital, LLC and Base Equities, LLC are under no obligation to update, revise or supplement the information and data disclosed herein after the date hereof, except as may be required under applicable securities laws.
All track record and prior investment performance is subject to and qualified by the following:
- As used herein, the term “Apparent Base Structured Finance Platform,” refers to the umbrella brand of real estate investments sponsored by Apparent Capital, LLC and Base Equities, LLC/or its affiliates. Accepted investors will be investing in Apparent Base Structured Finance Platform”, a Delaware limited liability company (the “Platform”).
- All references to IRRs reflect returns on an investment-by-investment basis. “Gross” returns are before acquisition fees, asset management fees, carried interest and other expenses whereas “Net” include the aforementioned fees and expenses. There can be no assurance that unrealized investments will be realized at the valuations used to calculate the IRRs contained herein and transaction costs connected with such realizations remain unknown and, therefore, are factored into the calculations as estimates only.
- Unless otherwise stated, all financial information provided herein is unaudited.
- Any reference to anticipated returns, forecasts and projections contained herein, including but not limited to targeted or projected NOI, cash flow, IRR, or multiple of invested capital, is merely an estimated “target” and inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those predicted or anticipated. While the targeted performance is based on assumptions that the Sponsors believe are reasonable, the actual returns will depend on a very broad range of factors applicable to individual investments.
There are risk factors that could cause certain assumptions to prove to be incorrect, which may include, without limitation: (i) changes in government policies and government activities in the debt markets; (ii) changes in interest rates; and (iii) economic and market conditions. No assurance, representation or warranty is made by any person that any targeted returns will be achieved, and no recipient of this document should rely on such targets. - The summaries of various investments are intended to be a brief summary of certain key terms and does not contain all material information regarding these investments. Additional information regarding these potential investments is available upon request.
- There can be no assurance that any potential transaction will be consummated or, if consummated, what the terms of such transaction will be until the final execution of the Subscription Materials.
- Past performance of investments made by persons affiliated with the Platform is not indicative of future results and there can be no assurance that the Platform will achieve results that are comparable to any prior investment described herein.