Fidelity Bancorp Won’t Chase Volume After Locking in $300M for California CRE Markets
Private credit platform Fidelity Bancorp Funding (FBF), which specializes in real estate bridge lending, has secured a $300 million commitment from investment firm TCW.
The incremental investment will mainly be used to “chase performance in the primary California markets,” Fidelity Bancorp’s CEO, David Frosh, told GlobeSt.com. In California, he said that means the multifamily, single-family rental and light industrial sectors, which continue to show resilience even in a higher-rate environment. Frosh will also keep his eye on the Western US as a whole, including Texas.
The new capital increases the Costa Mesa, Calif., firm’s total lending capacity to $600 million, strengthening its ability to serve private real estate investors in the state and elsewhere amid tightening credit conditions.
This underscores the growing institutional demand for high-quality private credit strategies backed by real estate, as investors seek income opportunities in a shifting market environment, as the Federal Reserve continues cutting rates.
“Bridge loans are the engine oil of the market, keeping deals moving when conventional financing can’t,” Frosh said.
“As the market stabilizes, transaction velocity is rising across commercial and multifamily, with bridge capital serving as a critical tool to help borrowers seize opportunities and execute. Investors are acting decisively to reposition, refinance, and acquire properties ahead of the next cycle of rate cuts. Bridge debt is a strategic tool that enables them to act now.”
Frosh said there is no set timeline for him to deploy this capital.
“We’ll move when the right opportunities arise,” he said. “We’re not chasing volume; we’re building a strong, sustainable portfolio. It’s business as usual, focusing on providing competitive financing to qualified borrowers and growing responsibly.”
While the broader economy isn’t in recession, parts of the commercial and multifamily sectors have faced real distress in recent years, he admitted. On the bright side, CRE is heading more toward stabilization, as vacancy and cap rates stabilize and confidence builds for returns, according to Frosh.
"We’re investing now so we can position Fidelity Bancorp Funding for success in the emerging market, not the one we’re leaving behind," he emphasized.
Source: GlobeSt/ALM