Colony Financial, the debt REIT floated by Colony Capital, has partnered with the firm’s private equity real estate funds to originate a $206 million first mortgage loan to US homebuilder William Lyons Homes, the firm said in a statement.
The deal marks the first major investment by the REIT following its $250 million initial public offering last month.
Colony Financial funded $50 million of the loan facility, alongside $156 million from Colony’s existing private equity real estate funds. The funds were not disclosed, although Colony said the loan originated was a maximum principal senior secured term loan.
Chief executive officer and president Richard Saltzman said the deal was a “prototype” transaction for the REIT, with a “high-cash pay feature and first-lien security”.
Newport Beach, California-based William Lyon will use the capital to restructure its balance sheet and repurchase debt. The firm said it would also look for opportunistic land deals.
Colony Financial has also completed a private placement of shares, taking the gross proceeds of its equity raise, including its IPO, to $292.5 million, since it floated at the end of September.