Jackie Bryant: Len, Robyn, whats your background, and what were you doing before jumping into the world of cannabis? Kalikow has reason to be angry. Mr. Kalikow is a graduate of the Wharton School of Business with degrees in Real Estate and Finance. But I think that really, the future is wide open. Gamma has originated billions of dollars of loans on hundreds of properties over the past half-century. Recently IPO-ed companies can be quite the endeavor to analyze. 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. 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. Based on her biography, Robyn's career started in 2007. 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. The Ohio medical program patient community has grown 87% from 2020 to 2021, and the Pennsylvania medical program patient community has grown 313% from 2020 to 2021. Cannabis is a rapidly growing industry. In July 2016, Beninati brought a 26-count lawsuit against Gamma, alleging improper conduct and that Gamma breached contracts between the two parties. We decided to share a few more details on this analysis than we usually since its a great case study for subscribers to learn from. Copyright 2023 Surperformance. 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. AFC's distribution yield would be 5.9% at today's $21 per share. The Kalikows arent exactly wet behind the ears when it comes to real estate lending. We have 16 borrowers in 17 states, and what we look for are companies that we can grow with over the long term. Enter your email address below to get our daily insider buying and selling report. But weve been very under the radar when it comes to lending. Mr. Kalikow is a graduate of the Wharton School of Business with degrees in Real Estate and Finance. Both markets have strong medical programs with a robust addressable market and population of patients. Are there any particular markets or segments that you two are excited about and why? I'd classify two of the seven as truly independent. And this offer includes a 2-Week FREE TRIAL plus my FREE book. 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 specializes in catalyst-driven markets with high barriers to entry, which he now applies to Gamma's nationwide opportunistic real estate investment and hard money lending strategies. I offered them options such as using their air rights in other parts of the city, Kallos added. Also, this article is free: written and distributed only to assist in research while providing a forum for second-level thinking. Mr. Kalikow is a graduate of the Wharton School of Business with degrees in Real Estate and Finance. As of February 15, theyve also reviewed 273 loans, 10 of which were funded; entered into non-binding term sheets for five more; began a syndication commitment letter for another; and were in the process of evaluating 23. 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. Markets never sleep, and neither does Bloomberg. Robyn Tannenbaum: Before cannabis, I was a healthcare investment banker for eight years focused on M&A and leveraged finance. Jonathan Kalikow. Moving down the line, Tomer Tzur appears to be truly independent. Gamma has originated billions of dollars of loans on hundreds of properties over the past half-century. The hurdles that you overcome as any growing company is the need for additional talent as you scale. Anything you build thats residential proximateis going to be expensive. I wrote this article myself, and it expresses my own opinions. A. Has the Foundation made any headway this year to support local communities? We uncovered Leonard and Robyn's wedding registry dated November 23, 2019. Join iREIT on Alpha today and get a "front row seat" to our "March Madness" REIT Bracketology series where we break down each property sector to arrive at the "Sweet 16 REITs" to own. The court concluded that Beninati had failed to establish a basis for relief on 12 of the remaining 13 counts. And, with few exceptions, companies involved are heavily excluded from the financial system. Moreover, he has valuable experience in marketing and consulting that will likely benefit AFC. At the same time, management indicated there were $561.8 million of potential loans under review. The lead director is affiliated rather than independent and appears to have a very close business relationship with the CEO. As in, now youve fucked with the wrong person.. JB: Cannabis companies of all sizes have been traditionally starved of access to capital most mom-and-pop and larger established businesses like MSOs cannot walk into a bank or financial institution and receive a loan. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. They purchased a total of 87,783 shares worth more than $1,380,633.40. A New Cannabis Dating Service Might Solve Your Financial Needs, Golf Odds, Picks And Props: 2023 Arnold Palmer Invitational Betting Preview, Most GOP Voters Support Weed Legalization, Says New Poll, Advanced Flower Capital Gamma (AFC Gamma). 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. All rights reserved. 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. We're very bullish on New Jersey as well. Is this happening to you frequently? 101 Park Avenue, 11th fl. 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. 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. All Rights Reserved. RT: Many success stories have resulted from our funding and operators that we provided capital to build and expand their businesses. New York, NY 10178 | (212) 9220222 |. Since we underwrite loans based on three pillars: cash flows, licenses and real estate, it doesn't make sense for us to focus our efforts in those states. And AFC Gamma was created roughly half a year later in mid-2020. Opinions expressed by Forbes Contributors are their own. Insiders at AFC Gamma own 28.0% of the company. AFC Gamma's insider roster includes Jodi Bond (Director), Jonathan Kalikow (Insider), Leonard Tannenbaum (CEO), and Robyn Tannenbaum (Director). Grace Prize for Most Inspiring Performance for TV, Movieguide. 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. Erykah Badu Talks Cannabis Line That Badu With Cookies, NCAA Basketball Odds 2023: West Coast, Sun Belt, Horizon, MVC Tip Off Conference Tournaments, Puff Puff Pass-Ing Covid? We really like the state of Ohio as the market continues to be ripe for cannabis operators since its a limited license state. But [Beninatis counsel] filed a document that said [3 Sutton Place] is not a single real estate asset. Leonard M. Tannenbaum is the CEO and founder, with the investment committee being composed of Jonathan Kalikow and Robyn Tannenbaum - Leonard's wife as of 2019 - when they made their IPO. So the emergence of an mREIT like AFC Gamma (NASDAQ:AFCG) is invaluable. And Beninati and his business partner Chris Jones had plenty of experience raising millions of dollars in financing, having overseen several large-scale development projects totaling $4 billion, according to the post-bankruptcy trial memorandum of decision dated Dec. 1, 2016. If you have an ad-blocker enabled you may be blocked from proceeding. The board of directors, meanwhile is led by Leonard M. Tannenbaum. In return for the apartments, plus $150,000 in cash, the lawsuit alleges that the Pilevskys received an indirect equity interest. But, the surrounding community, two years into a fight against super-tall neighboring commercial buildings, is determined to halt the project. LT: Giving back to others is extremely important to us. Id make over a billion! , Kalikow added, It was very clear that the money was not nearly as important to him as his name in lights.. Serial cheat Jonathan Neale, 40, fell asleep by his front door a Note that AFC is receiving sizeable pain-in-kind interest on five of its loans. 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. Like how the base management fee is 0.375% of "equity" and is paid quarterly, or 1.5% annually. Were prepared to build it. It had no debt at that time but did maintain a $40 million line of credit. Investors have flocked to states with legal recreational use, with some investment firms opening offices and making moves in states where legalization looms on the horizon. Thomas is also the author of The Intelligent REIT Investor Guide (Wiley) and is writing a new book, REITs For Dummies.. It engages in cash-flow lending like a BDC but incorporates its borrowers real estate value like an mREIT. We decided to partner with our borrowers to find charities that support people in the given state that they operate in to support the local communities. Address: 101 Park Avenue, Suite 2602, New York, NY, 10178, United States Phone: 212-922-0222 Fax: 212-922-2121 Website: Most recently, on Thursday, June 16th, Jonathan Gilbert Kalikow bought 57,600 shares of AFC Gamma stock. It will be a net positive for all operators. We believe even more institutions will enter the industry over time, given the growth the industry is experiencing. Under the terms of the second loan, Beninati had to either find a partner or find a buyer for the development, according to Kalikow. 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Gamma filed a complaint against Pilevsky, plus his sons Michael and Seth Pilevsky, for tortious interference, in a filing dated Sept. 16, 2016. And no obvious conflicts of interest. Somebody in the neighborhood [said to me], Did you know there is going to be a tower? AFC Gamma can also be reached via phone at 561-510-2390 and via email at [emailprotected] Learn More on Jonathan Gilbert Kalikow's contact information. Prior to co-founding Gamma, Jonathan Kalikow spent 18 years on Wall Street. (The city must log and address each complaint as it relates to construction safety. So he understands the layers of complexity involved. Acreage has one of those prized licenses, and we're looking forward to helping them continue building it out. Image Source; Jonathan Roumie's Instagram. The stock saw a nice near 20% gain on the day of the IPO. As an institutional lender, we provide financial solutions to the cannabis industry. Since we aim to find and fund strong deals in everyone's best interestthose of our investors, our borrowers, and our own our stringent loan-selection process means that most potential borrowers don't make it past our review process. So the portfolio isn't as robust in a rising interest-rate environment. Lending and banking are always timely topics in the cannabis business world, especially with federal reform and possible banking reform looming once again. But he met with us, and it was clear that he did not intend to make the sale.. 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. [Beninati] would have made $50 million after paying us off, had he done the sale, Kalikow said. First of all, we take a unique partnership approach. LEWIS J. LIMAN, United States District Judge: OPINION AND ORDER LEWIS J. 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