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. It comprised a $145. Phone (212) 883-2420 Email General info@gcpbid.org Email Press press@gcpbid.org 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. Insiders at AFC Gamma own 28.0% of the company. Companies like ourselves are known as commercial mortgage REITs which means we simply take a lien on the real estate as a lender. Both are also externally managed but have very long track records and proven management teams. Actor. 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. The legal relationship between the general partner, limited partner, and investment offering itself detailed, to say the least. But it will take time to build that out, get the market set up and have some of the regulations probably become more favorable. Copyright 2023 Surperformance. 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. Especially when theres so little actual history to work with. 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). Note that AFC is receiving sizeable pain-in-kind interest on five of its loans. Founder of Gamma Real Estate Capital Management, Inc., Jonathan Kalikow presently occupies the position of President for Gamma Real Estate Capital Management, Inc. and Director & Head-Real Estate at AFC Gamma, Inc. Learn More on AFC Gamma's active insiders. In the last twelve months, AFC Gamma insiders bought shares 5 times. Our public currency has allowed us to continue raising equity and granted us the ability to raise $100 million in unsecured debt with a triple B+ rating from Egan-Jones. Kalikow has reason to be angry. AFC Gamma seeks to work with operators, preferably in limited license states. The complaint alleges that the three of them, as strangers to the project, caused Beninati to breach contractual obligations following his maturity defaults and helped him file for bankruptcy in a scheme to benefit themselves and obtain an ownership interest in [3 Sutton Place]., Were suing Pilevsky for over $100 million, Kalikow said. We believe its well-positioned to profitably capitalize on the almost completely untapped market of financing cannabis projects. The company seeks to work with operators, ideally in limited license states. JB: Tell me more about the AFC Foundation. After the sale, I took some time off and started a family office, and saw an arbitrage opportunity in the cannabis industry while researching investments. The lead director is affiliated rather than independent and appears to have a very close business relationship with the CEO. While the then-single Robyn joined the firm in March 2014 while Leonard was still married to his second wife, Stacey Thorne. There's no perfect solution to this conundrum except to avoid externally managed companies. Invision. This building [101 Park Avenue] is next to Grand Central [Terminal], whereas it could take you another 40 minutes to get over there. He is survived by his wife of 52 years, Elizabeth; his daughter, Amy (Jonathan) Kalikow; his son, David H. (Lauren); a brother, Stanley; and six grandchildren. Jonathan Kalikow President of Gamma Real Estate & Triton Real Estate Investments New York, New York, United States 1K followers 500+ connections Join to view profile Gamma Real Estate The Wharton. Its lowest cash interest rate charged is 12%; the highest is 16%. Prior to co-founding Gamma, Jonathan Kalikow spent 18 years on Wall Street. After all, this started out as a beautiful dream. RT: We're excited about New York, although there is some work to do. Secondly, the suit claims that the Pilevskys altered the treatment of 3 Sutton Place, as a Single Asset Real Estate in the bankruptcy filing by transferring three small cooperative apartments at 504 Merrick Avenue in Lynbrook, N.Y., over to Beninati. 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. While we strongly prefer internal management, having the opposite doesnt mean we automatically ignore a company. Occupation. Jonathan Kalikow was born and raised in New York. And AFC Gamma was created roughly half a year later in mid-2020. Above that threshold, the manager receives 20% of core earnings, with a few strings attached. It engages in cash-flow lending like a BDC but incorporates its borrowers real estate value like an mREIT. Also, our amount of repeat borrowers is huge.. Back then, the site was comprised of three low-rise apartment buildings. Moreover, he has valuable experience in marketing and consulting that will likely benefit AFC. This approach gives the borrower confidence because they deal with one primary source versus large syndicated deals, so we can work with them if they need any amendments or changes to the loan. With license value being a component of our underwriting, we tend to focus on limited license states such as New Jersey, Florida, Pennsylvania, Ohio, to name a few. As an institutional lender, we provide financial solutions to the cannabis industry. So we tend to work with three different buckets of operators. Theres generally no 10-Qs or 10-Ks to analyze. But some of the ridiculous things he was asking for led us to believe that he would never find a partner, Kalikow said, one example being a $50 million step-up in basis cashed-out to him. And you have a lot of traffic and logistical issues to overcome. So it's critical to use limit orders when transacting such a low liquidity stock. On the other hand, we also have other vehicles that don't necessarily need real estate as collateral. So he understands the layers of complexity involved. The interference made it difficult for Kulick to do his job, and he came. Its a pain. Jonathan 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. Our bid out of bankruptcy [for 3 Sutton] was $86 million, so thats a $100 million crystallized loss. Williams Equity Research's founder has been analyzing institutional investment and operational due diligence for the last decade. You may opt-out by. Get started New York City Marriages, 1950-2017. Actor and former White House aide Kal Penn explores solutions to the climate crisis with a dose of humor and optimism. (Kalikow was insistent that he does not loan to own, even if that turned out to be the case for 3 Sutton Place. Somebody in the neighborhood [said to me], Did you know there is going to be a tower? So the portfolio isn't as robust in a rising interest-rate environment. There are 4 older executives and no younger executives at AFC Gamma. Contact Jonathan + Leaflet Gamma Real Estate 101 Park Ave New York, NY, 10178-0002 Cost Brad Thomas is the CEO of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 10,000 investors around the world. 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. 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. ), I am proud of it, Kallos responded cheerfully to Kalikows accusation that he urged residents to call 311. Information on this page was last updated on 6/17/2022. This unique partnership approach with each of our clients allows us to find solutions to help them expand and grow alongside them. They deposed the architects who attended the meeting, who didnt remember whether we were there or not, but said that if we were there, we said nothing. Marker Address Rent ? Mr. Kalikow specializes in what he terms "catalyst-driven markets with high barriers to entry," a strategy that he applies to Gamma's debt . We look forward to making our first of many donations shortly and positively impacting these communities. 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. This creates a very quick and reliable way to boost its cash flow from about $1.25 per share to $1.50-$1.75 in short order. (The city must log and address each complaint as it relates to construction safety. Please disable your ad-blocker and refresh. Mr. Kalikow is a graduate of the Wharton School of Business with degrees in Real Estate and Finance. We believe even more institutions will enter the industry over time, given the growth the industry is experiencing. Marijuana product sales remained steady, and even saw gains in some states, including in Florida. There are corporate governance concerns, but the portfolio is highly profitable and suited to grow very quickly. Id make over a billion! , Kalikow added, It was very clear that the money was not nearly as important to him as his name in lights.. We needed someone with significant real estate expertise and brought on Jonathan Kalikow as our third partner. Prior to co-founding Gamma, Jonathan Kalikow spent 18 years on Wall Street. Mr. Kalikow is AFC's Head of Real Estate as well as a member of the AFC Board. To summarize the analysis of the board, the CEO is chairman. Any person who is being bothered by construction at [the Sutton Place development] or at any site in my district, I ask them to call 311; I ask them to reach out to me personally. Most recently, shes been advising on mergers and acquisitions and leveraging finance transactions in the healthcare sector at CIT Group. 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. 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. When Bauhouse filed its plans for the 87-story tower, Sutton Place locals made a bid for a zoning change that would block super-tall skyscrapers in Sutton Place. So how is AFC Gamma helping cannabis companies gain access to capital and what do you offer them? First of all, we take a unique partnership approach. Is this an April Fools Day joke? . There are parts of this deal that made a lot of sense to us.. Both markets have strong medical programs with a robust addressable market and population of patients. That's 40.74x the amount of originated and funded loans it had as of February 15, 2021. AFC Gamma, which stands for Advanced Flower Capital, announced it raised $80 million of equity from 20 family offices, completing the first round of its $200 million investment vehicle, according to a press release. If you have an ad-blocker enabled you may be blocked from proceeding. I guess its hurt a little bit in terms of [business driven by] word of mouth, but because we have a 50-year history of doing this, were [easily vetted]. Create a free family tree for yourself or for Jonathan Kalikow and we'll search for valuable new information for you. Copyright 2022 Gamma Real Estate. 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. Learn More about Jonathan Gilbert Kalikow's net worth. About Jonathan Learn Jonathan's areas of practice. Gamma Real Estate Capital Management, Inc. One early loan that we funded was with a company called OnePlant, run by Brady Cobb. The roster of those who testified included Beninati, N. Richard Kalikow, JLLs Keith Kurland (as debt and equity adviser to Beninati, tasked with sourcing the projects financing) and Jon Kalikow. I was also in charge of investor relations at Fifth Street and was doing healthcare consulting while we both recognized the lending opportunities in cannabis. Coupled with its other financial resources, it's sufficient to achieve a diversified portfolio capable of demonstrating AFCs abilities. Traditional financing is notoriously difficult to get for cannabis companies, experts say. So we want to see: As for the first, AFCs management and investment committee members have approximately 100 years of combined investment management experience. But before getting there, its worth examining the origins. RT: Since starting AFC Gamma, we have completed almost $500 million of transactions we provide capital to an industry that others do not and, in turn, allow these operators to build cultivation facilities, production facilities, and dispensaries. Get notified the next time Jonathan Gilbert Kalikow buys or sells AFC Gamma stock. Mr. Harrison is currently Senior Operating Partner at Merida Capital Partners, "a private equity firm specializing in the cannabis ecosystem.". Like Beninati and Bauhouse, the Pilevskys did not respond to COs requests for comment. For now, Kalikows eyes are firmly on the finish line. In this case, the fee to fire the external manager is three times the annual base management fee (1.5% of equity) and the annual incentive compensation (variable, but likely 2-6% of equity) based on the trailing 12-month period. 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. This is industry standard and in line with the likes of Blackstone Mortgage Trust (BXMT). Does AFC see lending opportunities in the California market, or do you typically shy away from the Golden State and facilitate deals in limited licensed states? LT: Right now, we are one of the biggest lenders in cannabis. I have no business relationship with any company whose stock is mentioned in this article. AFC's total capitalization was $200 million at year-end after incorporating proceeds from the IPO. But [Beninatis counsel] filed a document that said [3 Sutton Place] is not a single real estate asset. The hurdles that you overcome as any growing company is the need for additional talent as you scale. We understood [Beninatis] shortcomings but we saw a lot of embedded value, Kalikow said. Opinions expressed by Forbes Contributors are their own. In return for the apartments, plus $150,000 in cash, the lawsuit alleges that the Pilevskys received an indirect equity interest. RT: AFC Gamma is a commercial mortgage REIT. The fact of the matter is, lawsuits cost a lot of money. Three of the companies are still active while the remaining one is now listed as inactive. That isn't unfavorable given how challenging even the latter half of 2020 was. Last December, Gamma filed plans for its own 844-foot, 67-story tower at 3 Sutton Place, for which construction has recently commenced. Awards. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Are there any particular markets or segments that you two are excited about and why? His estimated net worth is $600000. Prior to co-founding Gamma, Jonathan Kalikow spent 18 years on Wall Street. According to glassdoor.com, a Hollywood actor's average yearly salary in the United States is $35,550. We want to be there for the company's second and third financing. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps. They just need avoid certain types of relationships for at least three years. They were a Florida operator that we backed in November 2020 and provided capital to build out their Indiantown cultivation facility. These companies can't even get bank accounts. Kallos, Krueger, Garodnick and a representative of Brewer met with Kalikow on May 11 to discuss controversies surrounding the site, including the communitys firm opposition and how steep a climb Gamma would have to complete the project. And of the four directors classified as independent, one worked under said CEO as recently as 2017. But, the surrounding community, two years into a fight against super-tall neighboring commercial buildings, is determined to halt the project. Termination fees are another point of contention. . 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. Robert Levy, another independent director, has substantial experience in retail and multifamily commercial real estate. Following the completion of the transaction, the director now directly owns 97,500 shares of the company's stock, valued at $1,522,950. He also holds a JD from Fordham University School of Law and is a member of the New York State Bar Association. [In 2015], Beninati goes and describes the enormity of the project, which pisses off all the neighbors, who then raise money for their councilman [Ben Kallos], who then starts a rezoning proposal, Kalikow said. in the cannabis industry in states that have legalized medicinal and/or adult use cannabis.". AFC's distribution yield would be 5.9% at today's $21 per share. Photo by pcess609/iStock via Getty Images. 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. 101 Park Avenue, 11th fl. This article was coproduced with Williams Equity Research (WER). Leonard M. Tannenbaum is the CEO and founder, with the investment committee being composed of Jonathan Kalikow and Robyn Tannenbaum Leonards wife as of 2019 when they made their IPO filing. And, then, it got even stickier: Beninati declared bankruptcy. (Podcast). And, with few exceptions, companies involved are heavily excluded from the financial system. Jonathan 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. 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. And this offer includes a 2-Week FREE TRIAL plus my FREE book. Image Source; Jonathan Roumie's Instagram. Serial cheat Jonathan Neale, 40, fell asleep by his front door a The DOB was doing their job. Address: 101 Park Avenue, Suite 2602, New York, NY, 10178, United States Phone: 212-922-0222 Fax: 212-922-2121 Website: This is a BETA experience. The company is co-founded by Robyn and Len Tannenbaum along with Jonathan Kalikow. While not necessarily unusual, this potentially augments Leonard's already powerful decision-making ability even further. Construction. 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). That said [ 3 Sutton Place ] is not a single real estate as collateral the... Total capitalization was $ 200 million at year-end after incorporating proceeds from the IPO markets strong. House aide Kal Penn explores solutions to the cannabis industry in states that have legalized medicinal adult! Interest rate charged is 12 % ; the highest is 16 % issues to overcome Kalikows accusation that he residents! In the healthcare sector at CIT Group door a the DOB was doing job! Is chairman, run by Brady Cobb last twelve months, AFC Gamma insiders shares... These communities it, Kallos responded cheerfully to Kalikows accusation that he urged residents to call 311 achieve a portfolio! 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