New Residential Investment Corp. recently entered into a definitive agreement with affiliates of The Goldman Sachs Group, Inc. to acquire Genesis Capital LLC, a leading business purpose lender that provides innovative solutions to developers of new construction, fix-and-flip and rental-hold projects, and acquire a related portfolio of loans, according to a company release.

Genesis is expected to originate approximately $2 billion of loans in 2021 and has originated over 12,000 loans since 2014. Genesis supports developers throughout the property lifecycle, partnering to create value for their long standing and new borrower relationships. New Residential intends for Genesis to operate as an independent subsidiary.

“The acquisition of Genesis adds a new complementary business line to our company and advances our ability to create and retain additional strong housing assets for our balance sheet,” Michael Nierenberg, chairman, chief executive officer and president of New Residential, said in the release. “We are excited to work with the seasoned Genesis team and add business purpose lending to our suite of products, furthering our connectivity with a new subset of borrowers. We see the acquisition of Genesis as a great opportunity that supports our growing single-family rental strategy and one that allows us to capture additional unmet demand from our retail and wholesale origination channels.”

“We are thrilled to join the New Residential family and share our mission of providing differentiated solutions for our borrowers,” Robert Wasmund, chief executive officer of Genesis, said. “Over the years, we have grown Genesis into a leader within the business purpose lending industry, offering developers a broad suite of customized solutions. We pride ourselves on executional excellence, which is why almost all of our customers are repeat borrowers and our portfolio has exhibited minimal losses. We look forward to combining our experience with New Residential’s deep industry knowledge and robust balance sheet as we seek to expand our product offerings and grow in new markets.”

Anthony Arnold, managing director at Goldman Sachs, said he was delighted Genesis has found a great partner.

“We would like to thank the Genesis management team for their leadership over the course of our investment. Under our ownership the team has successfully scaled in new markets nationwide and grown their book substantially while maintaining exceptional credit quality,” Arnold said. “We are delighted that they have found a great partner to continue their growth and we wish them much success.”

New Residential intends to finance the transaction with existing cash and committed asset-based financing from Goldman Sachs. The transaction is targeted to close during the fourth quarter of 2021, subject to certain approvals and customary closing conditions.

Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to New Residential. Goldman Sachs & Co. LLC acted as exclusive financial advisor and Davis Polk & Wardwell LLP acted as legal advisor to Genesis.