LOS ANGELES, CA - Investment vehicles managed by Colony Capital, LLC, and Colony Financial, Inc. ("Colony Financial"), a newly formed real estate finance company focused on acquiring, originating and managing commercial mortgage loans, today announced the origination of a $206 million maximum principal senior secured term loan facility to William Lyon Homes. Colony Financial will fund $50 million of this loan facility alongside $156 million to be funded by the other participating investment funds managed by Colony Capital.
Colony Capital and Colony Financial were selected to provide this first lien mortgage financing based on their extensive experience in real estate financing, competitive terms, timing, certainty of funding and the ability to negotiate and close the transaction in a short period.
"With more than 50 years of experience in the homebuilding industry, William Lyon Homes has built an envious operating record through multiple housing cycles," said Thomas J. Barrack Jr., founder, chairman and CEO of Colony Capital. "We believe in the long-term fundamentals of the industry and are encouraged by the recent improvement in housing fundamentals. General Lyon has built a superb company and a best-in-class management team, which is well-positioned to take advantage of extremely attractive opportunities the industry has not seen for several decades."
General William Lyon, Chairman and Chief Executive Officer of William Lyon Homes, stated, "We are extremely pleased to announce the completion of our senior secured term loan facility with Colony Capital. Colony's excellent reputation and long history of success in real estate financing make them the ideal partner, and this transaction has laid a foundation for a strong relationship."
Bill H. Lyon, President and Chief Operating Officer of William Lyon Homes, added, "The liquidity provided by this facility provides William Lyon Homes with the resources and flexibility to capitalize on opportunities in the marketplace and to continue with our strategic initiatives."
William Lyon Homes intends to use the proceeds from this facility to enhance liquidity, repurchase debt and restructure its balance sheet, as well as for opportunistic land acquisitions and general corporate purposes.
"We are pleased to have the opportunity to execute such a significant high-yielding, quality investment just three weeks after our initial public offering," said Richard Saltzman, Chief Executive Officer and President of Colony Financial. "This first major investment is a testament to the relationships we enjoy in the commercial real estate marketplace and is viewed as a prototype for future transactions within the REIT. The attractive yield profile, high cash pay feature and first-lien security within the capital structure are what make this transaction attractive to Colony Financial. We are being selective in our asset allocation, focused on building the optimal portfolio for the long term."
Source: Colony Financial, Inc.