Trinity, Broadmark Announce $1.2B Merger

Trinity will acquire Broadmark Capital to create a new commercial mortgage REIT with a value of $1.5 billion.
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Trinity Merger Corp., a special acquisition company created by an affiliate of Trinity Real Estate Investments LLC, and real estate lender Broadmark Capital announced a merger of the two brands in a $1.2 billion deal. Trinity’s purchase of Broadmark will form a new commercial mortgage REIT called Broadmark Realty Capital Inc. that will have an expected equity value of $1.5 billion.

The acquisition agreement entailed Trinity paying $98 million in cash and $1.1 billion in Broadmark Realty stock, according to the announcement by the two firms. Real estate financing firm Broadmark, which was founded in 2010 and headquartered in Seattle, expects to have no debt outstanding at closing. Broadmark, which specialized in small balance loans, had previously launched and grown funds across the Western and Sunbelt markets in the U.S., raising more than $820 million to fund its loan portfolio between 2010 and March 2019, according to the company.

The deal is expected to close in early November and Jeffrey Pyatt, president of Broadmark Management LLC, will become the CEO of Broadmark Realty, while Joseph Schocken, founder and president of Broadmark Capital, will serve as chairman of the board of directors. The rest of the executive team at Broadmark will stay on in their respective roles at the new company.

Following the closing of the transaction, the new company plans to form one or more private REITs that will be organized and externally managed by a subsidiary of Broadmark Realty, Pyatt said in the company’s announcement.