Hollywood Apartments Sold For Shares In OTC-Traded Lender In $190M Deal
The owner of an apartment building in Hollywood, Florida, sold its property for shares in a private credit company aspiring to list on the Nasdaq Stock Market.
New York-based Favo Capital paid $190M for the 1818 Park building in an all-stock and assumption-of-liabilities acquisition. GCF Development acquired 49 million shares in Favo at a price of 76 cents per share, Favo Capital President Shaun Quin told Bisnow in an interview Thursday.
GCF, led by Charles “Chip” Abele, developed the 22-story tower in 2021, more than a decade after it purchased the site at 1818 and 1820 Hollywood Blvd. in 2009 for $3.5M, The Real Deal previously reported.
Abele sold the property to another affiliate controlled by GCF in 2022 in a deal valued at $65M, according to deed records, and refinanced it with an $84M mortgage from Deutsche Bank to repay its construction debt, TRD reported.
Favo Capital assumed the debt as part of the deal and refinanced it through Blackstone, Quin said, declining to provide the exact value of the new mortgage besides saying Favo “reduced that debt substantially.”
Favo, which is led by founder and CEO Vincent Napolitano, has been in talks with GCF for four to five years, Quin said, but Abele's debt situation meant the timing was right.
“We saw an opportunity where we could assist in balancing their loan-to-value ratios with their mortgages that they had in place, and we could come in with fresh capital and restructure some of that debt, which adds to the assets on our balance sheet,” Quin said. “And at the same time, we were able to talk to their board and to their investors and show them the opportunity of converting their ownership equity into shares of Favo Capital.”
Favo Capital offers debt and financing solutions to small businesses and has done deals in 45 states. Its shares trade on the over-the-counter market, but in December it filed paperwork to uplist its stock to the Nasdaq. The company rose 13% in value Thursday to $2.14 a share, or a market cap of more than $208M.
It had nearly $13M of revenue in 2024, according to its annual report, and a roughly $9M net loss. It had $32M in debt liabilities and $19.9M in assets.
“This acquisition is more than a real estate play, it’s a deliberate step to strengthen our balance sheet and broaden the collateral base that underpins our private credit business,” Quin said in a statement announcing the deal.
The building, which overlooks Young Circle on Hollywood Boulevard, has 273 apartments ranging from studios to three-bedroom units between 350 SF and 2,320 SF and priced between $1,610 and $8,370, according to Apartments.com. It also has 10K SF of ground-floor retail and office space.
GCF is also part of a handful of joint ventures working on branded projects, like the Armani/Casa Residences Pompano Beach, expected to deliver in 2028, and the Yacht-branded Riva luxury residences in Fort Lauderdale.
While Favo — which has operations in Fort Lauderdale, New York and the Dominican Republic — had planned to wait until it was listed on the Nasdaq before buying real estate, Quin said the deal still works in its favor by adding assets that can help secure bigger credit lines and access cheaper capital.
The company secured an $8M preferred equity investment from Stewards Investment Capital in May.
“Our goal is definitely pushing towards that Nasdaq as soon as humanly possible,” Quin said. “Can't give you any timelines on that, but we'd like to make that possible.”
