Fortress Considers Sale of Real Estate Lender CoreVest

(Bloomberg) -- Fortress Investment Group is exploring strategic options including a sale of CoreVest, a lender to residential real estate investors, according to people with knowledge of the matter.

Fortress, the investment firm owned by SoftBank Group Corp., is working with an adviser as it solicits interest from potential buyers for CoreVest, which could fetch $400 million or more in a sale, said the people, who asked not to be identified because the information isn’t public. Representatives for Fortress and CoreVest declined to comment.

CoreVest, led by Chief Executive Officer Beth O’Brien, in April said it surpassed $5 billion in closed loans across more than 35,000 properties. The company offers short-term credit lines, bridge financing and both portfolio and single-property loans. Fix-and-flip loans can be as much as $15 million and represent as much as 90% of a project’s cost, while larger credit lines for portfolios of rental properties can exceed $100 million, according to CoreVest’s website.

The company, which is based in Irvine, California, was founded in 2014 as Colony American Finance and rebranded after being acquired in 2017 by funds managed by affiliates of Fortress.

CoreVest was formed in a second wave of institutional investment in single-family rentals, as the same Wall Street firms that scooped up rental properties in the aftermath of the U.S. foreclosure crisis sought to finance smaller landlords who had traditionally struggled to access loans. Investors continue to demonstrate demand for rental properties, though the housing recovery has made cheap homes harder to come by.

--With assistance from Patrick Clark.

To contact the reporters on this story: Sonali Basak in New York at sbasak7@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, ;Michael J. Moore at mmoore55@bloomberg.net, Josh Friedman, Debarati Roy

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