Artes Capital, a balance sheet lender that provides funds for real estate acquisition, development, repositioning and refinancing transactions across the Western states, roared into the marketplace in 2021. Launched in April, Artes’ core fund deployed more than $100 million into loans on 56 properties. Across two inaugural funds, Artes secured more than $180 million of capital and commitments from registered investment advisors, high-net-worth individuals and institutions.
The term “Artes,” which is derived from the Latin word for “arts,” points to the company’s delivery of creative, service-driven funding solutions. This approach, combined with an emphasis on cultivating meaningful relationships by a team with decades of combined experience in managing, operating and generating loan production for high-performing private real estate lenders, has propelled the company through a prosperous first year and positioned it for continued growth in 2022.
“This business and industry are driven by relationships, not pricing/structure on any given single transaction,” said Founding Principal & CEO Scott Taylor. “Artes Capital wasn’t built in a year. It was built by the members of our founding team doing the right thing and treating people fairly over the course of the preceding decades. Our investors, borrowers, business partners and vendors all came to trust and believe in the Artes Team and what we could accomplish together. Our strong relationships with the entire ‘Artes Community’ are what have driven the initial success of the company.”
Valuations of real estate and other assets have continued to increase through 2021, despite global economic uncertainties attributable to inflation, the pandemic and supply chain issues. Concurrently, demand for Artes Capital’s unique financing options has also gained momentum. Due to increasing regulatory and capital adequacy constraints, traditional lenders have been unwilling or unable to return to their historic lending parameters. As a result, traditional lenders’ timelines for loan approvals and closings continue to lengthen. This trend provides nimble private lenders like Artes Capital with opportunities to fund quality loans requiring quick and reliable approvals with expedited closings.
The financial artisans at Artes Capital bring superior knowledge and innovation to crafting capital solutions for bridge and construction financing of commercial and residential real estate assets. The firm’s core competencies come to life in two recent examples:
1. When time is critical, borrowers choose Artes Capital first, because they know the Artes Team will respond with urgency and efficiency.
“We recently closed an acquisition bridge loan for a long-time, repeat client in only six business days, from start to close,” said Founding Principal & COO Michael Jin. “Due to the long track record with the client, the Artes Team was able to expedite its comprehensive and risk-mitigating underwriting processes in order to close on the property within the tight timeline stipulated by the seller.”
2. Through its artful application of financial expertise and original thinking, Artes Capital consistently creates solutions for borrowers and maximizes returns for investors.
Jin commented, “Many developers are experiencing cost overruns due to increased costs of materials and labor; pandemic-related delays (including supply chain bottlenecks, tight labor market conditions, delayed inspections/approvals from the local municipalities, etc.); and other setbacks. In this environment, not all lenders are in a position to help their clients get across the finish line. We fulfilled a client’s need by taking additional collateral and providing increased proceeds in order to complete his current project. Due to the relationship between the client and the Artes Team, combined with the borrower’s financial wherewithal, we were able to solve the problem creatively, while delivering a superior risk-adjusted return for our investors.”
As 2021 draws to a close, the Artes Team is taking an opportunity to reflect on the success of the past year. Foremost, the team is humbled by the support from the Artes Community and grateful for the opportunities it has encountered. According to Taylor, there are many who deserve thanks and acknowledgment for the company’s success, including “all of the Artes Team members who took a career risk to join a ‘startup’ fund; our business partners who injected capital to start the company based on a vision of relationship-based, rather than transactional lending; our founding investors who committed capital to a team of talented people in the middle of a pandemic; our sponsors who chose to do business with us because they wanted to see us succeed; and all of the family members, friends, mentors, service providers and others who stepped up to help in any way they could. Artes Capital would not be what it is today if any of these pieces were missing.
Looking ahead, Founding Principal & CFO Brian Stocker sees the potential for continued success in supporting clients, doing right by investors and supporting the Artes Capital Team. “Our mission in this next year is to build upon the tremendous success of our inaugural year of operations and continue to deliver creative and timely solutions for our clients, provide superior risk-adjusted returns for our investors and embrace the opportunities that challenge me and our team to grow both professionally and personally.”