US real estate finance firms Ready Capital and Broadmark Realty Capital to merge

Ready Capital Corporation, a real estate finance firm, and Broadmark Realty Capital, a specialty real estate finance company, have agreed to merge their businesses in an all-stock transaction.

The proposed merger is expected to result in the fourth-largest commercial mortgage real estate investment trust (REIT) with a capital base of $2.8 billion.

Post-merger, the combined real estate finance company, with a market capitalization of around $2.2 billion, will be called Ready Capital Corporation and will list on the New York Stock Exchange (NYSE).

Under the merger agreement, Ready Capital stockholders are anticipated to hold around 64% interest in the combined company while Broadmark Realty Capital stockholders are expected to have about 36% stake.

US real estate finance firms Ready Capital and Broadmark Realty Capital to merge

Thomas Capasse — Ready Capital Chairman and CEO said: “We are excited about the continued growth of our commercial real estate investment platform with the Broadmark transaction and believe it will provide strategic and financial benefits to all shareholders.

“We believe our asset management and workout experience, along with the synergies we expect to realize, position us well over the long-term.”

Ready Capital will also assume Broadmark Realty Capital’s outstanding senior unsecured notes.

The combined real estate finance company will continue to be managed by Waterfall Asset Management, LLC.

Jeffrey Pyatt — Broadmark Realty Capital Chairman and Interim CEO said: “We are thrilled to join the Ready Capital team to usher in a new chapter of growth for both organizations by forming the 4th largest commercial mortgage REIT.

“Our synergies are undeniable given the complementary skillsets, product offerings and geographic footprint.

“The Broadmark team is looking forward to working closely with our colleagues at Ready Capital to maximize the potential of our combined platform and deliver value for our shareholders.”

The close of the transaction is expected to occur in the second quarter of 2023, subject to certain customary closing conditions.

Broadmark Realty Capital specializes in originating and servicing residential and commercial construction loans.