The Real Estate Debt Platform

Arzan Wealth entered the real estate debt space in 2017, as part of its efforts to respond to changing to market conditions and to meet investors needs for a low risk profile and predictable cash flow stream. The Real Estate Debt strategy can enhance portfolio performance by adding senior and mezzanine debt investments to a real estate equity portfolio. In December 2017, Arzan Wealth developed and executed the first amortizing mezzanine loan in the US, in a unique certificate structure called REILS. Arzan Wealth has the exclusive rights for the REILS structure in the Middle East, while the exclusivity extends globally if the REILS is offered in a Sharia compliant manner. The REILS structure is an example of how Arzan Wealth is continually trying to innovate and offer clients superior risk adjusted returns, with a prime focus on safety and regular income. In addition to the REILS, we continue to identify and advise on other senior and mezzanine opportunities in the US and believe that real estate debt should play a role in any portfolio of investments focused on an attractive income stream and enhanced risk-adjusted returns.

List Of Transactions

Mezzanine Opportunity –Baltimore Residential Portfolio, Maryland, USA

An investment into a tax-efficient Jersey SPV that offered Mezzanine loan to a US based Sponsor and backed by a portfolio of residential properties in Baltimore, Maryland, USA. The funds from Mezzanine Loan would be used for recapitalization of existing portfolio of a single-family properties, consisting of 491 rental units in Baltimore. The properties have an average occupancy of 88.1% and are rented below market rates. The Portfolio is spread across an interesting mix of long-term workforce and "up and coming" neighborhoods, with both Section 8 Rental Certificate program and other government-funded programs.

Investment Date June 2023

Investor Distributions: Average 11 % p.a. (Payable quarterly)

Expected Holding Period: 3.5 Years

Expected IRR: ~13.3

Strategy: Debt

Mezzanine Opportunity – The Heights Hospital, Houston, TX, USA

An investment into a tax-efficient Jersey SPV that would offer a Mezzanine loan to a US based Sponsor and backed by The Heights Surgical Hospital (the "Heights Property") a Class A healthcare facility located in Houston, Texas, USA. Built in 1978 and fully renovated in 2022, The Heights Property is 167,445sft facility and is 100% leased to two premier healthcare tenants with a weighted average remaining lease term of 12.7 years. The property features high-acuity uses with significant building costs and barriers to entry and relocation. Payments on the 70% LTV Mezz loan will be supported by a 12.7 years lease with 1.9% annual increases and benefits from the strong credit of the parent entity. The Mezzanine instrument is secured against healthy financing covenants including 75% LTV testing, 1.5x DSCR, strong cash reserves.

Acquisition Date December 2022

Investor Distributions: 12% p.a. (Payable quarterly)

Expected Holding Period: 4 Years

Expected IRR: ~12

Strategy: Debt

Mezzanine Opportunity – REILS The Carpenter Health Network Medical Portfolio

This investment is a portfolio of 11 medical assets in the State of Louisiana ("Portfolio"), consisting of specializes in home health and hospice care to rehabilitation and other therapy services. The REILS payment will be supported by a 15 years lease with 2% annual increases to The Carpenter Health Network, a well-established healthcare operator with over 40 different locations across the south in Texas, Arkansas, Louisiana, Mississippi, Alabama, and Florida.

Acquisition Date March 2022

Investor Distributions: 8.0% p.a. (Payable quarterly)

Expected Holding Period: 2 Years

Expected IRR: ~8.8% to ~11.5% (Linked to MVI)

Strategy: Debt

Mezzanine Opportunity – REILS Calamar Multi Family Portfolio, USA

This investment is a portfolio of multi-family properties ("Portfolio"), consisting of 1339 rental units in the states of New York, Nebraska, Missouri and New Hampshire, USA. The properties currently have an average occupancy of 95%. The REILS investors would receive second charge on the existing portfolio as well as the new 3 buildings being developed

Calamar was founded in 1990 and developed a reputation for excellence in the real estate industry. It focuses on active adult rental which represents a growing segment with unique characteristics and positioning compared to traditional Multifamily and Senior Housing.

Acquisition Date November 2020

Investor Distributions: 8.0% p.a. (Payable quarterly)

Expected Holding Period: 4 Years

Expected IRR: ~8.40% to ~12.05% (Linked to MVI)

Strategy: Debt

Mezzanine Opportunity – REILS Allegiance Hospital Portfolio, Louisiana, USA

This investment is a Portfolio of 10 Acute Hospital in the state of Louisiana. The REILS would be senior to equity in a portfolio of ten assets of 674-beds, with total area of 871,146 sqft, serving as acute care medical centers owned by Allegiance Health Management Inc and located in Louisiana.

Founded in 2002, Allegiance Health Management Inc owns and operates rural acute-care hospitals primarily located in Louisiana. It also has licensed operations in Mississippi and Texas. The privately owned company is organized in an 'Op Co / Prop Co' structure, with Allegiance Management leasing the properties and operating and managing daily health care service delivery.

Acquisition Date May 2021

Investor Distributions: 8.5% p.a. (Payable quarterly)

Expected Holding Period: 4 Years

Expected IRR: ~9.50% to ~12% (Linked to MVI)

Strategy: Debt

Mezzanine Opportunity – REILS Baltimore Residential Portfolio, Maryland, USA

This investment is a portfolio of single-family properties ("Portfolio"), consisting of 272 rental units in Baltimore, Maryland, USA. The properties currently have an average occupancy of 95% and are rented below market rates.

The Portfolio is spread across an interesting mix of long-term workforce and "up and coming" neighborhoods, with both Section 8 Rental Certificate program and several strong local nonprofits providing a steady stream of tenants and credit enhancement to approximately 65% of the Portfolio, offering strong downside protection.

Acquisition Date October 2020

Investor Distributions: 8.25% p.a. (Payable quarterly)

Expected Holding Period: 6 Years

Expected IRR: ~10% to ~12.8% (Linked to MVI)

Strategy: Debt

Mezzanine Opportunity – REILS Calio Portfolio – (California & Ohio) ,USA

This investment is a portfolio of two properties located in Ohio and California in USA. The REILS would be senior to equity in a portfolio of (i) a residential wellness center in Ohio and (ii) an office building in California (the “Portfolio”). Cedar Oaks Wellness Center is expected to function as a residential wellness/rehabilitation center spread across 120 acres and is newly developed to focus on clients struggling with alcohol and drug addiction, as well as any underlying behavioral health issues. It is located in a suburb of Cincinnati, Ohio.

1300 U Street is an office building located in downtown Sacramento, the capital of California, and comprises 46,941 sq ft of single-storey space with modern infrastructure and amenities. The building is under renovation and is expected to be leased to The California Highway Patrol (CHP) for 10 years.

Acquisition Date October 2020

Investor Distributions: 9% p.a. (Payable quarterly)

Expected Holding Period: 6 Years

Expected IRR: ~10.4% to ~12.6% (Linked to MVI)

Strategy: Debt

Senior Secured Loan - Bluejack National Project, Texas, USA

This investment is a 3-year senior secured loan to Bluejack National Project (“Bluejack”), owner of a premier luxury-lifestyle community in Houston, USA. Bluejack includes the first and only Tiger Woods designed golf course in the United States. Located an hour northwest of downtown Houston, Bluejack offers up to 550 golf memberships and over 450 luxury home sites and private estate lots.

The senior secured loan has been structured in a Sharia-compliant manner. There are two amortization payments prior to the end of the loan period. The loan would have absolute seniority in the capital stack at a very conservative LTV.

Transaction Date: December 2018

Investor Distributions: 10.5% p.a. (Payable monthly)

Term 3 Years

Expected IRR ~ 10.5%

Mezzanine Opportunity – REILS New Orleans Multifamily Portfolio – LA, USA

This investment utilizes the innovative Real Estate Index Linked Securities ("REILS") instrument, which is an amortizing mezzanine loan, and has been structured in a Sharia-compliant manner. This REILS finances the acquisition of a portfolio comprising three multifamily properties consisting of 740 apartments located in New Orleans, Louisiana, USA. The properties currently have an average occupancy of 93%, and are rented just below market rates. The transaction is structured with a net 8% coupon, payable quarterly, and with an escalating quarterly amortization schedule. It is expected that at exit, the investors will have received approximately 87% of their investment through quarterly payments alone, and will receive an additional payment at the end of the instrument's term that is linked to the NCREIF South West Apartment MVI index.

Acquisition Date April 2018

REILS Coupon: 8.00 % p.a.

Expected IRR ~ 9.4% to ~11.8% (Linked to MVI)

Mezzanine Investment - Jackson Multifamily Portfolio – MS, USA

This investment is structured similar to an amortizing mezzanine loan, in a Sharia-compliant manner. This funding finances the acquisition of a portfolio comprising three multifamily properties consisting of 399 apartments located in Jackson, Mississippi, USA. The properties currently have an average occupancy of over 90%. The transaction is structured with a 9% coupon, payable quarterly, and with an escalating quarterly amortization schedule. It is expected that at exit, the investors will have received more than 95% of their investment through quarterly payments alone, and will receive an additional payment at the end of the instrument's term that is linked to the Mississippi Apartment MVI index.

Acquisition Date December 2017

REILS Coupon: 9.00 % p.a.

Expected IRR ~ 9.10% to ~14.0% (Linked to MVI)

​​​​​​​​​​​​The Real Estate Debt Platform​

List Of Transactions ​​

Mezzanine Opportunity –Baltimore Residential Portfolio, Maryland, USA

Mezzanine Opportunity – The Heights Hospital, Houston, TX, USA

Mezzanine Opportunity – REILS The Carpenter Health Network Medical Portfolio

Mezzanine Opportunity – REILS Calamar Multi Family Portfolio, USA

Mezzanine Opportunity – REILS Allegiance Hospital Portfolio, Louisiana, USA

Mezzanine Opportunity – REILS Baltimore Residential Portfolio, Maryland, USA

Mezzanine Opportunity – REILS Calio Portfolio – (California & Ohio) ,USA

Senior Secured Loan - Bluejack National Project, Texas, USA

Mezzanine Opportunity – REILS New Orleans Multifamily Portfolio – LA, USA

Mezzanine Investment - Jackson Multifamily Portfolio – MS, USA

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The Real Estate Debt Platform

List Of Transactions