The tide is turning for Tides Equities, according to company executives.
Tides co-founders and principals told The Real Deal the company extended maturity dates on troubled loans, locked down loan workouts on “several dozen” loans and secured lower interest rates on its variable-rate debt. The news comes after a rough summer peppered with looming capital calls and loans slipping into watchlist status.
Though Tides co-founders and principals Ryan Andrade and Sean Kia declined to provide specifics to TRD on the total number of loan workouts or which properties were affected, Kia told the publication that these new arrangements applied to “the bulk” of the firm’s portfolio.
The publication was unable to immediately independently confirm claims made by Tides founders, as none of the lenders with watchlisted loans responded to its requests for information. The information will eventually become public through servicer commentary because the loans are securitized, but Trepp and Morningstar information current as of Friday afternoon does not yet reflect these updates, TRD reported.
Tides Equities' portfolio includes more than 31,500 units in markets including Phoenix, Dallas, Austin and Las Vegas.
“Of the ones that need help, effectively all of them have received some sort of loan modification, which is awesome,” Kia said.
Two-thirds of Tides loans that were made into securitized debt were set to mature between this year and 2025, per TRD. The loan extensions will add two to four years to the maturity dates for the affected loans, according to Tides. The idea is that the interest rates will be lower at these new maturity dates, though that is not a given.
This is all good news for Tides, which, as recently as the summer, was preparing to ask investors for more money to help it meet expenses after it was hit hard by a one-two punch of rising debt payments due to higher interest rates and an inability to raise rents as much as it had anticipated in Texas and areas throughout the Sun Belt and Southwest where it had aggressively acquired properties.
In August, Tides Equities had nearly $1B in mortgages connected to 27 of its multifamily properties on servicer watchlists because income from the properties was not enough to cover the debt service on those properties, according to Trepp and Morningstar data reported by TRD.
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