In the last twelve months, AFC Gamma insiders bought shares 5 times. Traditional financing is notoriously difficult to get for cannabis companies, experts say. Originating senior secured loans to companies in the cannabis industry is its primary activity helping to finance land or buildings, equipment, licenses, and "other assets" that classify as colleterial to secure AFC's loans. Jonathan Roumie is drinking coffee. There is still a limited subset of institutional investors who are comfortable with cannabis, despite us being listed on NASDAQ. We made one loan then we made a second loan to complete the purchase. Gamma provided an 18-month loan that then was refinanced with a seven-month, $147 million loan in June 2015. And tell me more about your approach to lending, what do you look out for and why? Its a powerful image.. Robert Levy, another independent director, has substantial experience in retail and multifamily commercial real estate. I think theres a group of potential buyers that would find living in that area exciting, he said. If you can't find at least a few really good and bad aspects of a new company especially in a new and controversial industry, you probably aren't looking hard enough. He's spent his entire life here and his family's real estate roots run four generations deep. So he understands the layers of complexity involved. Theres generally no 10-Qs or 10-Ks to analyze. We also talked to them about the fact that the rezoning we were proposing would actually give them additional floor area ratio on sitethat wasnt on site and already therein order to build affordable housing. He is survived by his wife of 52 years, Elizabeth; his daughter, Amy (Jonathan) Kalikow; his son, David H. (Lauren); a brother, Stanley; and six grandchildren. It was not a threat; it was a specific explanation of the fact that I had hoped that we could work together., One of the ways Kalikow believes Kallos followed through on what he thought was a threat was through the communitys increased use of 311 calls this past summer, specifically around the Fourth of July weekend, which invited greater scrutiny on the site. A. Cannabis is a local business, where the operators become entrenched in the local communities providing jobs and revenue to the states. Thats when it announced: AFC Gamma completed a first close of its $200 million investment vehicle, having raised approximately $80 million of equity from over 20 large family offices. It could also be positive for lenders assuming they have the infrastructure and capabilities to scale and decrease the cost of capital once the money starts flowing and more deals are being made. This is impressive since the company didn't exist a year ago. The charities we evaluate are focused on causes that are important to our borrowers. RT: Many success stories have resulted from our funding and operators that we provided capital to build and expand their businesses. The spokesman also said that after the stop-work order was issued, workers were allowed to remediate the inefficient underpinning of a neighboring building and make the site safe, but that no other construction work was allowed. Get notified the next time Jonathan Gilbert Kalikow buys or sells AFC Gamma stock. RT: Since starting AFC Gamma, we have completed almost $500 million of transactions we provide capital to an industry that others do not and, in turn, allow these operators to build cultivation facilities, production facilities, and dispensaries. So it's critical to use limit orders when transacting such a low liquidity stock. institutional investment and operational due diligence for the last decade. When Bauhouse filed its plans for the 87-story tower, Sutton Place locals made a bid for a zoning change that would block super-tall skyscrapers in Sutton Place. So the portfolio isn't as robust in a rising interest-rate environment. The company was purchased by Cresco for $213 million a year later after we financed them. Enter your email address below to get our daily insider buying and selling report. The fact of the matter is, lawsuits cost a lot of money. All told, were talking about nothing absolutely horrible but nothing absolutely attractive either in this regard. View Jonathan Kalikow's record in New York, NY including current phone number, address, relatives, background check report, and property record with Whitepages. Brewer first met with Bauhouse to discuss the site, prior to Gamma taking it over and recalled, We met with [Bauhouse], and Ill admit I said, This is an awfully tall building. SUITE 1770, WEST PALM BEACH FL, 33401. We didnt make an error. . We weren't able to discern what type of healthcare companies were involved. Half of the 26 counts were dropped before the trial, and over five days of hearings last November, the Southern District of New Yorks bankruptcy court held a trial regarding the remaining claims. China Equity Emerging Markets Gold and Silver International Dividend US Dividend US Energy US High Dividend US Large Cap Growth US Large Cap Value US Mid Cap Growth US Mid Cap Value US REIT US Small Cap Growth US Small Cap Value US Sustainable (ESG) That isn't unfavorable given how challenging even the latter half of 2020 was. This is the entire management team provided on Fifth Street's website, another company founded by Tannenbaum. In cannabis, it's sometimes difficult to predict the timing of closings, but were excited about our pipeline. Information is often lacking there, and one has to dig very deep to uncover the full picture. Jackie Bryant: Len, Robyn, whats your background, and what were you doing before jumping into the world of cannabis? While we strongly prefer internal management, having the opposite doesnt mean we automatically ignore a company. Because of this, our expectations surrounding AFCG's pipeline and margins directly correlate with estimates of its fair value. Now, even Taiwan's own foreign minister is saying that China is on the cusp of a full scale invasion. As in, now youve fucked with the wrong person.. Kalikow interpreted that as a threat and that Kallos was going to do something with these tenants to hurt us, he said. But I think that really, the future is wide open. But, despite his past, he's not optimistic about. Add in the inherent complexity of mortgage REITs and the ever-changing nature of cannabis legislation and it's a worthy challenge. Grace Prize for Most Inspiring Performance for TV, Movieguide. Robyn Tannenbaum: Before cannabis, I was a healthcare investment banker for eight years focused on M&A and leveraged finance. On Feb. 17, 2016, Bauhouse filed a suit seeking a preliminary injunction to stop the foreclosure sale. Kalikow said that his team explained to Beninati that in almost no other scenario would he cash out for $50 million. Background Report for Jonathan Kalikow. Employment Details. I wrote this article myself, and it expresses my own opinions. AFC Gamma is a commercial mortgage REIT that provides loans to companies secured by three pillars: cash flows, licenses, and real estate. The company managed $5 billion of assets across multiple private investment vehicles and two publicly-traded business development companies. Our platform includes a publicly-traded company, a private BDC and a network of Family Offices that allows us capacity to support portfolio companies over long periods of time. But weve been very under the radar when it comes to lending. Its a pain. He is president and founder of Gamma Real Estate, a boutique commercial real estate firm based in New York City. Jonathan Neale, 40, fell asleep by his front door after a day of drinking and . AFC Gamma, Inc. originates, structures, underwrites, and invests in senior secured loans, and other types of loans and debt securities for established companies operating in the cannabis industry in states that have legalized medicinal and/or adult use cannabis. And lending is only one feather in their cap: Gamma has also owned and built over 12,000 multifamily units across the U.S.9,000 in the southeastern U.S.and owns 10 million square feet of office space in Manhattan alone. We see relatively heavy volume on the day of the IPO, though that quickly subsided. We have asked all our borrowers to provide us with two to three charities they are passionate about, and we are currently evaluating our first few charities and going through the vetting process. He is the son of N. Richard Kalikowthe chairman and chief executive officer of Gamma and cousin of Peter Kalikow, the former Metropolitan Transportation Authority chairman and the founder of real estate firm H.J. RT: AFC Gamma is a commercial mortgage REIT. Given this "unique" arrangement and its direct impact on AFC's decision making it's time to put on our institutional due diligence officer hat. Jon Kalikow is President/Co-Founder at Gamma Real Estate. After some further analysis, I realized there was a void in the cannabis market as there was no institutional lender, and capital was only being provided by sale-leasebacks or family offices. Since that also applies to his grammar, please excuse any typos you may find. They changed the bankruptcy law for real estate in 2005 to say that if youre a single real estate asset its a faster trackso, you as the developer cant tactically declare bankruptcy and indefinitely hold up your lender, Kalikow explained. Bauhouse Group likely will not see any proceeds from sale of controversial East Side site They changed the bankruptcy law for real estate in 2005 to say that if youre a single real estate asset its a faster trackso, you as the developer cant tactically declare bankruptcy and indefinitely hold up your lender, Kalikow explained. He also holds a JD from Fordham University School of Law and is a member of the New York State Bar Association. Additionally, AFC Gamma has a credit line of up to $40 million, providing the REIT with approximately $120 million of capacity to lend to cannabis operators. Opinions expressed by Forbes Contributors are their own. When Beninati resurfaced later with new legal counsel, it kick-started another (ongoing) lawsuit in the 3 Sutton Place saga, and another player entered the picture: Philip Pilevsky, the CEO of real estate owner and property management company Philips International. When Beninati defaulted on the $147 million loan from Gamma, the lender foreclosed on the property and later acquired it in a foreclosure auction for $86 million ($98 million including air rights), outbidding Brooklyn investor Isaac Hager. All Rights Reserved. The roster of those who testified included Beninati, N. Richard Kalikow, JLLs Keith Kurland (as debt and equity adviser to Beninati, tasked with sourcing the projects financing) and Jon Kalikow. We also remain very optimistic about the prospects in New Jersey and New York. (Beninati, officials at Bauhouse Group and their legal counsel never returned COs requests for comment. Still, I would say that we continue to focus on limited license states and the buildout of new states such as Georgia, which has six licenses awarded that will be a home run state for those six operators. We believe even more institutions will enter the industry over time, given the growth the industry is experiencing. Im proud. (When asked about a stop-work order issued on June 28 by the New York City Department of Buildings, Kallos said, I wish I could take credit for that stop-work order. But some of the ridiculous things he was asking for led us to believe that he would never find a partner, Kalikow said, one example being a $50 million step-up in basis cashed-out to him. There, he invested across industries and asset classes on behalf of institutions, family offices, and wealthy individuals as a proprietary trader at Morgan Stanley and then as a hedge fund portfolio manager and trader at various funds and firms. At the same time, management indicated there were $561.8 million of potential loans under review. Portfolio Builder / Fund Intersect. We needed someone with significant real estate expertise and brought on Jonathan Kalikow as our third partner. The DOB was doing their job. Kallos said that during the meeting, he flagged the height of the building and warned Kalikow that it might be in Gammas best interest to scale down the project to fit the neighborhoods context or use its air rights elsewhere. We have found though, that REIT loans give our clients the most flexibility, and we are able to finance more companies this way. Out of curiosity, how many potential deals has AFC Gamma vetted since its inception, and how many made it to funding or commitment? And, then, it got even stickier: Beninati declared bankruptcy. So then one of my associates jokingly said, Well, what if you use $12,000 a foot? Joe runs the numbers and says, Oh my god. AFC Gamma works with cannabis companies nationwide. Jonathan Kalikow. As for margins, theyre quite strong. Is this happening to you frequently? We like the state of Arizona. Its lowest cash interest rate charged is 12%; the highest is 16%. Jonathan Kalikow Board of Directors Gamma Real Estate Contact GCP encourages questions, feedback and suggestions from our local stakeholders and visitors alike. I surmise that [Pilevsky] was introduced to Joe, who told him, Woe is me, I dont want to lose my baby, Kalikow said. By January 2016, the ERFAbacked by Kallos and Manhattan Borough President Gale Brewer as well as State Senator Liz Krueger and Councilman Dan Garodnickhad formed and filed its first rezoning application with the Department of City Planning, looking to cap the height of the building and also secure a section of the residential development for affordable housing units. in the cannabis industry in states that have legalized medicinal and/or adult use cannabis.". Pennsylvania Senators also discussed the potential for recreational for the first time at a GOP-led committee hearing in February. Acreage has one of those prized licenses, and we're looking forward to helping them continue building it out. At the end of trial, one of their defenses was they never read the documents that they signed.. But it will take time to build that out, get the market set up and have some of the regulations probably become more favorable. And no obvious conflicts of interest. We offer our clients our expertise in understanding unique industry issues, the flexibility to customize financing solutions to each transaction and deep relationships with cannabis-focused investors and industry experts. Leonard founded the firm and remains as chairman and CEO. The estimated net worth of Jonathan Gilbert Kalikow is at least $1.52 million as of June 16th, 2022. LT: Throughout my career, I've been fortunate to have significant experience with taking companies public to date, I've taken four companies public, including AFC Gamma. Cannabis is a rapidly growing industry. I guess its hurt a little bit in terms of [business driven by] word of mouth, but because we have a 50-year history of doing this, were [easily vetted]. Create a free family tree for yourself or for Jonathan Kalikow and we'll search for valuable new information for you. Jonathan Kalikow President Gamma Real Estate. We offer a flexible solution to meet the needs of our borrowers. But Id love to stay in., Thats not to say there havent been interested suitors. Theyve also directly structured over $10 billion in loan transactions and taken three companies public. But, its 3 Sutton Place that has been the subject of the most industry chatter (and headaches for Kalikow) over the past couple of years, and the embattled property isnt out of the woods yet. And that's the point where things start looking quite attractive for AFC. New York, NY 10178 | (212) 9220222 |. Jonathan specializes in catalyst-driven markets with high barriers to . But common sense and statistical analysis does indicate greater risk of lower quality Board of Directors construction and efficacy. It generated $5.25 million in revenue from July 31 through December 31. There's no perfect solution to this conundrum except to avoid externally managed companies. "As long as God keeps bringing me stories that I can honor him with, to me, it doesn't matter what genre they . According to glassdoor.com, a Hollywood actor's average yearly salary in the United States is $35,550. We have it in our [loan] documents that if you do anything to fight a foreclosure youre fully personally liable, but if you turn over the deed, youre not personally liable, Kalikow said. Still, Gamma Real Estate nevertheless found itself embroiled in a real estate battle and forced into the spotlight after it financed Joseph Beninatis Bauhouse Groups 87-story residential development at 3 Sutton Place between East 57th and East 58th Streets. View Public Record Results ✓ Addresses. We understood [Beninatis] shortcomings but we saw a lot of embedded value, Kalikow said. We made one loan then we made a second loan to complete the purchase. Gamma provided an 18-month loan that then was refinanced with a seven-month, $147 million loan in June 2015. On Feb. 23 the motion was denied on the merits that the borrowers would not be irreparably harmed by the sale and that the equities favored allowing Gamma to enforce its contractual rights. When youre looking at this building in the skyline as you come over the 59th Street Bridge, its center stage. There are so many great opportunities to put capital to work with good borrowers. There, he invested across industries and asset classes on behalf of institutions, family offices, and wealthy individuals as a proprietary trader at Morgan Stanley and then as a hedge fund portfolio manager and trader at various funds and firms. Invision. There are parts of this deal that made a lot of sense to us.. Under the terms of the second loan, Beninati had to either find a partner or find a buyer for the development, according to Kalikow. These comparisons contain one major weakness: AFCG has no leverage. We uncovered Leonard and Robyn's wedding registry dated November 23, 2019. But if admittedly a big if its portfolio grows to a couple billion in the next few years while enjoying current economic conditions. In this case, the fee to fire the external manager is three times the annual base management fee (1.5% of equity) and the annual incentive compensation (variable, but likely 2-6% of equity) based on the trailing 12-month period. Also, our amount of repeat borrowers is huge.. Jonathan Kalikow was born and raised in New York. Has the Foundation made any headway this year to support local communities? Photo by pcess609/iStock via Getty Images. Please disable your ad-blocker and refresh. Oh, and there was a bankruptcy filing in between. Mr. Kalikow is a graduate of the Wharton School of Business with degrees in Real Estate and Finance. So we want to see: As for the first, AFCs management and investment committee members have approximately 100 years of combined investment management experience. The hurdle rate or minimum amount of core earnings produced on a percentage basis applicable to the performance fee (otherwise known as the incentive fee or carried interest) paid to the external manager is 2% per quarter. We provide term loans, draw facilities, and construction loans. Chart Data in Insider Trading History Table. AFC's distribution yield would be 5.9% at today's $21 per share. So the emergence of an mREIT like AFC Gamma (NASDAQ:AFCG) is invaluable. Learn More about insider trades at AFC Gamma. Marker Address Rent ? When you're lending to a Verano or an Acreage, you're not just lending to one state; you're lending to multiple states. All rights reserved. Insiders at AFC Gamma own 28.0% of the company. Fortunately, WER's expertise is in the private institutional space. Learn More on Jonathan Gilbert Kalikow's trading history. Given its especially profitable, high-interest rate loans even somewhat expensive leverage will create a spread of at least 500 basis points and potentially 800-900. This is a BETA experience. Beninati had a different perspective, describing Gammas role as active in court documents, saying that the lender demanded that the developers make dozens of changes to the project design, implementation and construction. Beninati also alleged that Gamma was not a lender but a partner and acted as equity, Kalikow said. David Ingles and Yvonne Man bring you the latest news and analysis to get you ready for the trading day. Kalikow, the 47-year-old married father of four girls ages 8, 10, 12 and 17, is the president of Gamma Real Estate and a man of real estate pedigree par excellence. But [Beninatis counsel] filed a document that said [3 Sutton Place] is not a single real estate asset. Copyright 2022 Gamma Real Estate. 9. If I want to buy it, Ill buy it, but I want the borrowers to be successful at the end of the day, he said.). We find solutions to help them expand and meet their needs versus roadblocks. Is this an April Fools Day joke? . The only way to advance the communities that our borrowers serve is by ensuring all residents have the opportunity to succeed. Our coverage spectrum includes equity REITs, mREITs, Preferreds, BDCs, MLPs, ETFs, and we recently added SPACs to the lineup. Gamma has originated billions of dollars of loans on hundreds of properties over the past half-century. It had no debt at that time but did maintain a $40 million line of credit. Mr. Kalikow is currently 52 years old. Jonathan Kalikow and Leonard Tannenbaum AFC Gamma, a West Palm Beach-based real estate investment trust, now has $120 million in capital on hand to lend to cannabis operators. Their experience seems at least sufficient for their roles. We don't just want to be there for the company's first financing. About Jonathan Learn Jonathan's areas of practice. Jonathan Kalikow is currently associated with one company, according to public records. JB: Tell me more about the AFC Foundation. We were at the meeting doing our due diligence and checking on the project like any good lender would. That's 40.74x the amount of originated and funded loans it had as of February 15, 2021. AFC Gamma, Inc. has elected and qualified to be taxed as a real estate investment trust for the United States federal income tax purposes under the Internal Revenue Code of 1986. Learn More on Jonathan Gilbert Kalikow's contact information. LT: From January 1, 2020, through December 24, 2021, we have reviewed 443 deals and have funded 21 loans. A spokesman for the DOB said that between May 1 and Sept. 25, 18 DOB-related 311 complaints were made regarding the property. Company/Fund Name: Gamma Real Estate Capital Management, Inc. Heis also the editor of The Forbes Real Estate Investor., Thomas has also been featured in Barron's, Forbes Magazine, Kiplingers, US News & World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox., He is the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 (based on page views) and has over 106,000 followers (on Seeking Alpha). The stock was acquired at an average cost of $15.62 per share, with a total value of $899,712.00. JB: AFC Gamma is currently located in Florida, the largest medical market in the U.S. are there any other medical markets or opportunities that seem like attractive targets? Then theres partner and head of real estate Jonathan Kalikow, and Thomas Geoffroy, CFO. JB: Can you provide an overview of your investment portfolio and explain what types of companies AFC Gamma tends to work with? On the other hand, we also have other vehicles that don't necessarily need real estate as collateral. So we tend to work with three different buckets of operators. It engages in cash-flow lending like a BDC but incorporates its borrowers real estate value like an mREIT. "I love Jesus and it is the honor of my life to get to portray him," he said. Track your investments 24 hours a day, around the clock from around the world. This building [101 Park Avenue] is next to Grand Central [Terminal], whereas it could take you another 40 minutes to get over there. ), I am proud of it, Kallos responded cheerfully to Kalikows accusation that he urged residents to call 311. Marijuana product sales remained steady, and even saw gains in some states, including in Florida. I was also in charge of investor relations at Fifth Street and was doing healthcare consulting while we both recognized the lending opportunities in cannabis. I have no business relationship with any company whose stock is mentioned in this article. It has committed to lending another $30 million to existing borrowers and to two new borrowers, according to the release. The third tier is smaller operators. We tend to focus on deals in limited license states and also deals that have real estate as collateral. We see a lot of deals, and the biggest hurdle is continuing to find good operators to back, focusing on our due diligence and making sure that the investments that we're making are suitable solid investments. Banco Inbursa was one of the first lenders out of the gate, entering into negotiations for the projects financing and executing a term sheet for a $70 million loan. The complaint alleges that the three of them, as strangers to the project, caused Beninati to breach contractual obligations following his maturity defaults and helped him file for bankruptcy in a scheme to benefit themselves and obtain an ownership interest in [3 Sutton Place]., Were suing Pilevsky for over $100 million, Kalikow said. His estimated net worth is $600000. For now, Kalikows eyes are firmly on the finish line. RT: We're excited about New York, although there is some work to do. We feel good about its strength, although the number may fluctuate from time to time, and we look forward to continuing to advance the cannabis industry. Just last month, AFC Gamma successfully sold 6.25 million shares of common stock at $19 per share. With the expansion of dispensaries, we believe those cultivation licenses will only become more valuable as well as the dispensary locations. The board of directors, meanwhile is led by Leonard M. Tannenbaum. That's considerably lower than the likes of Blackstone Mortgage Trust and Starwood Property Trust's (STWD) ~8% yields the two commercial mREIT heavyweights. The most investor-friendly board of directors in the world will still hesitate to fire a terribly performing external manager if its too costly. Companies like IPR engage in sale-leasebacks. Get started New York City Marriages, 1950-2017. Hes talking about 3 Sutton Placethe subject of three years of lawsuits, bankruptcies, foreclosures, political haggling and endless 311 calls. Prior to co-founding Gamma, Jonathan Kalikow spent 18 years on Wall Street. In its suit against the Pilevskys, Gamma said that the delay allowed groups like the East River Fifties Alliance (ERFA) to organize against its development. JONATHAN KALIKOW et al, Defendants. Pilevsky says, We know how to deal with lenders, well handle this for you. So they try to get an injunction to stop the foreclosure..
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