MEET THE PELORUS EQUITY GROUP TEAM: WHERE EXPERIENCE AND INNOVATION INTERSECT
By Rob Sechrist
When Dan Leimel and I co-founded Pelorus Equity Group in 2010, our intent was to provide value-add bridge lending solutions in the commercial and residential real estate space. Cannabis wasn’t our focus at that time but after the Rohrabacher-Blumenauer Amendment passed in 2014, which defunded the Department of Justice from prosecuting any cannabis-related business in a medically licensed state, it became clear to us that demand would be increasing for cannabis-ready real estate, build-outs and expansions. We knew that access to financing for these projects through traditional lenders could prove to be difficult, and that this gap created a huge opportunity for us as investors. So in 2016, we decided to pivot the fund to provide fast, reliable lending for cannabis real estate.
Cannabis is now the largest new asset class of real estate in the U.S., but at the time it was, and still is, under-financed. Build-outs have unique requirements which are expensive and challenging to finance. Any delays to cannabis businesses operating means lost revenue. When that monthly revenue is in the millions, those delays are immensely costly. Since we’ve had a singular focus on cannabis build-outs we’ve been able to develop lending solutions that help operators overcome the special lending challenges in this sector, translating into better outcomes for those operators, and higher returns, at lower risk, for our investors.
This requires a deep understanding of the supply dynamics within the market—a generalized dataset is not sufficient. Early on, our team recognized that the standard real estate databases available to us were not going to cut it—we needed technology that didn’t yet exist—so we built our own proprietary Data Project analytics platform that tracks and analyzes in real time the intricacies of the supply dynamics of cannabis-related property across the U.S.
The data this tool provides helps us accurately assess risk and value, and hence price that risk correctly. This allows us to move quickly and with certainty since we can understand the long-term value of specialized improvements required for each project. As a result, we can often lend the full amount required, and one agreement can cover the financing of the entire project. Only a team with deep domain expertise could think of such innovative ways to stay ahead of the curve. Dan, now our CEO, has been operating, owning and managing lending companies, loan servicing entities and real estate funds for 33 years. Dan oversees all operations at Pelorus and also acts as Sr. Underwriter, Head of Loan Committee and Fund Control Manager for all construction draws related to the Pelorus loan portfolio.
Our managing partner Travis Goad, has over 13 years of experience in commercial real estate investing across the capital stack, including debt and equity investments. He sits on our credit committee and is responsible for the origination of new loans and new equity/debt investments.
As President at Pelorus, my primary role is the development of strategic alliances with investors, the formation of equity partnerships, and coordinating growth plans into new markets. (We’re always looking for the right partners, so please don’t hesitate to reach out if you’d like to connect and learn more about what we’re up to.)
Our six years of tenure in this still young industry may seem short, but it is actually one of the longest. And in the broader debt financing markets we have underwritten thousands of deals as a team, totalling over ~$250M to date. In 2021, we have seen 434% year-over-year growth, impressively outperforming our projections by 134%. Ending the year with $243M AUM and more equity than any other privately held or publicly traded commercial real estate lender in the cannabis sector ($193M), I am confident (and excited!) at how well equipped this team is to make the most of the myriad opportunities this industry presents for our partners—whether they be owner-operators or investors.
Note: Figures in this blog were correct at the time of publishing. Please read our latest press releases for the most up-to-date news and figures.
About Pelorus Equity Group
Pelorus Equity Group (“Pelorus”), the leading provider of value-add bridge commercial real estate loans to cannabis businesses and owners with cannabis-related real estate, and its Pelorus Fund, a private mortgage real estate investment trust (“mREIT”), are changing the commercial real estate lending landscape in the cannabis sector. Pelorus Fund offers a range of innovative transactional solutions to address the diverse needs of real estate investors and portfolio managers, and its flexible acquisition and bridge lending programs are the direct result of the firm’s involvement in more than 5,000 transactions of varying size and complexity. Since 1991, Pelorus’ principals quickly understand an opportunity, structure a logical solution and execute a timely close and have participated in more than $5B of real estate investment transactions using both debt and equity solutions. To date, Pelorus has completed 63 commercial real-estate loan transactions and deployed more than $350 million to cannabis businesses and real estate owners, comprising of more than 3,200,000 sq. ft. in eight states across the U.S. With the ability to fund approved construction draws for reimbursement in an average of one to three days and a single agreement covering the financing of the entire project, the Pelorus Fund helps to stabilize cash flow for its clients, so they are able to remain focused on their core business goals and objectives.
Pelorus Equity Group Media Contact