Mezzanine debt lender Nectar has kicked off 2025 with a surge of deals that support projects across multiple states and real estate sectors, including multifamily and student housing as well as hospitality.
The firm has invested in over a dozen properties with 1,359 units. The mezzanine debt for the recent deals ranges between $625,000 and $2.3 million, with the largest funding for a student housing property in Oxford, Mississippi.
CEO and co-founder Derrick Barker attributes the busy first-quarter activity to “a lack of liquidity in the market coupled with a strong opportunity set for strong operators.”
“As interest rates have risen and traditional lenders have pulled back, great sponsors are becoming more open to exploring alternative capital options,” he adds.
Nectar, which was founded in 2021 by Barker and Brittany Mosely, provides liquidity to owners and operators in the form of mezzanine financing and allows accredited investors to earn predictable returns that are backed by low-leverage, cash-flowing real estate.
“Our financing is unique in that we allow owners with cash-flowing assets that have a lot of equity in their properties to gain access to that equity without having to sell or refinance out of their existing low interest mortgage,” says Barker. “This is attractive as now is not a good time to sell or refi, but there are a lot of interesting acquisition opportunities in the market for strong developers with access to capital. We provide that capital.”
The active funding start to the year comes on the heels of a strong 2024 for the firm. Last year, it saw 191% year-over-year growth in revenue. Based on this momentum, it is projecting to invest over $100 million in new deals this year. According to Barker, the firm is focused primarily on multifamily housing in metro areas that have strong housing demand and a diversified economic base.
Barker notes the uncertainty being seen in today’s lending environment.
“My read of basic economics is that if the government reduces spending and increases taxes (or tariffs), it will cause an economic slowdown. It is unclear how that economic slowdown will play out and what that will mean for housing demand and interest rates,” he says. “If housing demand is weaker (slower economy) and prices are higher for materials and labor, this would be painful for property owners. And the asset values that they borrowed at, especially in 2021 and 2022, will not be justified and will cause payment difficulties. This could be a downside case for commercial real estate. And especially for properties that are already highly leveraged.”
