Transaction will add business purpose lending to the firm’s product suite
New Residential Investment Corp. has agreed to buy Genesis Capital, a construction and fix-and-flip lender, from The Goldman Sachs Group.
The firm said it has entered into a definitive agreement to acquire Genesis, which is expected to originate roughly $2 billion of loans this year, and its related portfolio of loans. Once the deal is closed, Genesis will operate as an independent subsidiary of New Residential.
New Residential chairman and CEO Michael Nierenberg said that they view the acquisition “as a great opportunity that supports our growing single-family rental strategy and one that allows us to capture additional unmet demand from our retail and wholesale origination channels.”
“The acquisition of Genesis adds a new complementary business line to our company and advances our ability to create and retain additional strong housing assets for our balance sheet,” Nierenberg added. “We are excited to work with the seasoned Genesis team and add business purpose lending to our suite of products, furthering our connectivity with a new subset of borrowers.”
New Residential intends to finance the transaction with existing cash and committed asset-based financing from Goldman Sachs. The deal is expected to be completed during the fourth quarter of 2021, subject to certain approvals and customary closing conditions.
“We are thrilled to join the New Residential family and share our mission of providing differentiated solutions for our borrowers,” said Robert Wasmund, CEO of Genesis. “Over the years, we have grown Genesis into a leader within the business purpose lending industry, offering developers a broad suite of customized solutions. We pride ourselves on executional excellence, which is why almost all of our customers are repeat borrowers, and our portfolio has exhibited minimal losses. We look forward to combining our experience with New Residential’s deep industry knowledge and robust balance sheet as we seek to expand our product offerings and grow in new markets.”
Read more: New Residential reveals strong Q1 results
“We would like to thank the Genesis management team for their leadership over the course of our investment,” said Anthony Arnold, managing director at Goldman Sachs. “Under our ownership, the team has successfully scaled in new markets nationwide and grown their book substantially while maintaining exceptional credit quality. We are delighted that they have found a great partner to continue their growth, and we wish them much success.”