Axar Capital, Morning Calm Debut Middle-Market CRE Platform

Located in Dallas, 12790 Merit Drive is one of the three buildings comprising Towers at Park Central, which Morning Calm acquired last year. Image courtesy of CommercialEdge

Axar Capital Management and Morning Calm Management have launched a joint real estate lending platform to originate senior and mezzanine loans in the commercial real estate sector.

The new outfit, Morning Axe Management, will invest and manage discretionary capital on behalf of institutional investors, including life insurance companies, Axar and Morning Calm said in a statement.

Based in Des Moines, Iowa, the company will have origination teams across the country. The venture, which will have access to $250 million of capital, has enlisted Raymond James to raise further funds. Target sectors include industrial, office, retail and self storage, as well as multifamily.

Morning Axe’s credit and structured finance business will focus on new solutions in commercial borrowing, free of the pitfalls faced by traditional lenders, the sponsors said in a statement.

Rising interest rates and the high cost of capital have created an opening for the new platform in refinancing and acquisition lending, T.J. Heither, principal & head of national originations at the new entity, said in prepared remarks. Heither was most recently senior vice president, national commercial real estate, at Susser Bank.

Combined, Boca Raton, Fla.-based Morning Calm and New York-based Axar have deployed more than $5 billion of capital since their respective inceptions. Morning Calm focuses on special situation investing, while Axar specialized in corporate middle-market investment.

Recent office sector activity

Morning Calm recently announced it had launched Morning Calm Office Finance, a $500 million joint venture with an undisclosed global investment manager. That joint venture is focused on providing office owners and investors financing solutions and is slated to be one of the first specialized credit vehicles focused on the office sector. The firm cited the retreat of big and regional banks, life insurance companies and debt funds from office financing as creating an opening. The company acquired Towers at Park Central, a three-building office campus in Dallas totaling approximately 875,000 square feet, from TPG late last year, with plans to renovate the property.