Avana Companies and funds managed by Oaktree Capital Management have formed the new $250 million Avana-Oaktree Private Credit Partnership as part of a direct private commercial real estate lending strategy. Through the joint venture, Avana will use the capital to provide private debt financing in the United States over the next three years.
AOPCP aims to support local economies and create jobs. The funding will provide small to medium enterprises in the commercial real estate sector with access to capital in the form of bridge and construction loans for all CRE products.
“Oaktree has firsthand experience through past partnerships with Avana,” Justin Guichard, managing director and co-portfolio manager at Oaktree, said in a statement, adding that the Avana team’s “expertise and reputation” in the CRE lending industry aligns with Oaktree’s focus on risk control in private credit investments.
Both Avana and Oaktree have experience in the CRE industry and supporting SMEs across the country. Recently, Avana Companies entered a partnership with a national hospitality group to provide franchisers with capital to develop and renovate commercial properties across the United States.
“We meet with every business owner we have lent to; it is important to us to put a name and a face to a loan as part of our due diligence, credit underwriting and risk mitigation,” said Sanat Patel, chief lending officer and co-founder of Avana.
Since 2002, Avana has served over 500 small businesses with 66 percent of their entrepreneurial customers being Black, Indigenous and People of Color. Avana has funded $1 billion in loans to minority entrepreneurs, which have directly and indirectly created more than 5,500 jobs.
“After 22 years of working within the CRE industry and SMEs, we recognize the challenges of this tight lending environment and that's why we are challenging our team to lend $250M in the first year,” said Sundip Patel, CEO and co-founder of Avana Companies. “This capital from Oaktree enables us to multiply our social impact exponentially, offering financing opportunities to entrepreneurs and supporting financial inclusion.”