May 27, 2020 | by Commercial Mortgage Alert
As it did during the last downturn, opportunistic investment shop Davis Cos. plans to become more active investing in debt.
The Boston fund manager, led by founder Jonathan Davis, has formed a partnership with former Colony Capital executive Robert Gatenio to buy discounted commercial MBS and commercial real estate CLOs. The joint venture also will originate “gap equity financing,” which could take the form of mezzanine loans or preferred equity.
Davis is committing up to $75 million of equity, while Gatenio will handle purchases.
“Securities are the first to get re-priced in any market, in any dislocation,” said Gatenio, who also runs his own firm, Trails End Capital of Larchmont, N.Y. “Given mark-to-market, there are going to be forced sellers out there. Being opportunistic, being set up and being able to pick your spots as this unfolds is pretty attractive.”
Jonathan Davis said his firm is prepared to increase its investment in the joint venture depending on market conditions. “We hope to be able to find the opportunities to scale that up,” he added.
The playbook for Davis Cos. is essentially the same as during the Great Recession. In 2009, the shop hired Emily Cooper as director of fixed-income investments from Putnam Investments. During the 2009-2013 period, half of Davis’ investments were in distressed debt, both securities and whole loans. Cooper later left the firm.
“The experience we had last time, and we’re seeing it again this time, is that the public market re-prices before the private market,” Davis said. “While there’s a period of price discovery going on in the private markets right now, we’re seeing a number of public market opportunities in real time.”
Gatenio most recently was a managing director and co-head of investment management at Colony, as well as executive chairman of a REIT the Los Angles firm managed called NorthStar Healthcare Income. He left those posts around yearend 2018 to start his own firm. He previously worked at NorthStar Realty Finance, a New York REIT that merged with Colony in 2017.
At NorthStar, where he started in 2006, Gatenio worked with Rick McCready, who then was chief operating officer of the REIT and now is president of Davis Cos.
The Davis Companies And Stonemont Financial Group Completing First Phases Of 6.8 Million SF Georgia International Trade Center
May 14, 2020 | by Boston Real Estate Times
Boston – The Georgia International Trade Center, a $500 million development in Savannah, Georgia which will comprise nearly 7 million SF of manufacturing/warehouse space upon completion, has achieved significant progress in construction and leasing, according to The Davis Companies and Stonemont Financial Group, joint venture partners in the massive project’s development, alongside Chesterfield, a firm that specializes in the development of office and industrial properties throughout the southeastern United States.
The Georgia International Trade Center site totals 1,150 acres and is ideally located within 10 miles of the Georgia Ports Authority (GPA) Garden City Terminal and 3.8 miles from Interstate 95. Construction began in March of 2019 and is complete or underway on four buildings totaling 2.42 million SF, of which 1.65 million SF has been leased or placed under contract for sale. Tenants include global flooring manufacturer, and Berkshire Hathaway subsidiary, Shaw Industries Group (1.07 million SF), healthcare products manufacturer Dukal Corporation (270,000 SF) and third-party logistics services provider Sunland Logistics Solutions (150,000 SF). Plans call for the construction of up to six more buildings on the property, totaling an additional 4.4 million SF.
David Allen, Senior Vice President of Asset Management for The Davis Companies, attributes the unparalleled success of the project to the firm’s partnership with Stonemont Financial Group and Chesterfield. “The Georgia International Trade Center presented an opportunity to join forces and leverage the complementary expertise of our respective teams. We look forward to completing the remaining 4.4 million square feet of development, building upon the tremendous accomplishments achieved thus far at GITC,“ said Allen.
The Georgia International Trade Center is the Savannah metro area’s latest large-scale Class A industrial park and is the last park able to be constructed within 10 miles of the GPA’s main Garden City Terminal that can accommodate build-to-suits of over 1 million SF.
In calendar year 2019, the Port of Savannah moved 4.6 million twenty-foot equivalent container units (TEUs), an increase of nearly 250,000 TEUs (5.6 percent) compared to the previous year. The Port of Savannah handled 8.5 percent of U.S. containerized cargo volume and 10 percent of all U.S. containerized exports in FY2017. The Port is the 4th largest in the U.S. (based on TEU throughput volume), and GPA continues to invest billions of dollars in port infrastructure to support its growth.
Davis Cos., Suffolk U. Offer Buildings To House Homeless Amid Pandemic
March 30, 2020 | by Catherine Carlock, Boston Business Journal
The Davis Cos. will provide a shuttered former acute-care hospital in Brighton, and Suffolk University is repurposing a downtown dormitory, in efforts to help the city of Boston battle the coronavirus pandemic among its homeless population.
According to a city press release on Sunday, Boston-based real estate firm The Davis Cos. will allow the city access to 1515 Commonwealth Ave., a shuttered former Kindred Care hospital in Brighton where the firm has proposed a 330-unit residential building. The former hospital will provide 70 beds “that will be ready to open within days,” the city said. The Boston Public Health Commission and the Boston Health Care for the Homeless program will operate the facility.
“As the full magnitude of the COVID-19 crisis became clear, we knew we needed to help in some way,” said Stephen Davis, managing director of development for The Davis Cos., in a statement “Concerned that the crisis posed a significant challenge to the city’s hospital infrastructure, we began identifying assets we own that might be of service. This nearly 60,000 square foot former hospital facility was sitting idle as we prepared to redevelop the site and represented an opportunity to help. We are fortunate to live and work in a City where strong leadership enables quick action to protect this high-risk population during such an unprecedented time.”
Meanwhile, Suffolk’s Nathan R. Miller Residence Hall at 10 Somerset St. will provide 172 beds, “helping reduce congestion and increase social distancing in existing shelters in Boston.” Pine Street Inn and the Boston Public Health Commission will manage the facility.
“Mayor Walsh has been clear that the precautions and preparations the city, its institutions, and its residents take now will be critical to successfully responding to the crisis,” said Suffolk University President Marisa Kelly in a statement. “We commend him for his leadership, and we stand ready to help in any way. Boston is our home, and the University takes very seriously its responsibility to be a good citizen at a time when we are all being called upon to pitch in and help.”
Newton Pavilion, a former Boston Medical Center hospital building at 88 E. Newton St., will also be reopened to meet coronavirus-related needs for the region’s homeless population.
The city and Boston-based Suffolk Construction have also built a 38-bed isolation and quarantine facility adjacent to the 112 Southampton Shelter in Boston, which will augment the 17-bed Barbara McInnis House of the Boston Health Care for the Homeless.
“We must care for one another and never forget the individuals and families in our community who need us most, especially during these unprecedented times. We must also do everything we can to support the caregivers and healthcare professionals on the front lines battling the coronavirus every day,” said John Fish, chairman and CEO of Suffolk, in a statement. “We were honored and privileged to answer the call from the City of Boston by providing our support, sharing our resources and constructing sophisticated temporary healthcare facilities that allow healthcare professionals to treat and care for members of our homeless population with the dignity and respect they deserve.”