DUBAI, United Arab Emirates: Arzan Wealth (DIFC) Limited (‘Arzan Wealth’), a Dubai-based advisory firm regulated by the Dubai Financial Services Authority, is pleased to announce that it has advised on a mezzanine lending opportunity in the United States, as part of its strategy focusing on investments into debt structures. 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.
The REILS capital is senior to equity in a portfolio of 11 medical assets serving from home health and hospice care to rehabilitation and other therapy services. This REILS investment is secured by a 15-year lease with 2% annual increases to a well-established healthcare operator with over 40 different locations across the south in Texas, Arkansas, Louisiana, Mississippi, Alabama, and Florida.
The current REILS transaction is structured with annual net distributions of 13.5% including the 5% amortization, payable quarterly during the 2-years holding period. It is expected that at exit, the investors advised by Arzan Wealth will have received around 28% 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 higher of a national Apartment Index, and the national Consumer Price Index (CPI). The total IRR of this REILS investment is structured with a floor of 8.8% and a ceiling of 11%, depending on the performance of the indices.
Arzan Wealth advised on the structuring of the REILS instrument and the due diligence of the underlying assets and will continue its advisory role during the holding period of this investment.
Muhannad Abulhasan, CEO of Arzan Wealth said:
“We see a tremendous opportunity to grow our REILS transaction volume during 2022 and beyond, with an increased investment by Arzan Wealth in strengthening our deal sourcing and due diligence capabilities on the ground. The amortization structure inherent in the REILS instrument allows our clients to recover their investment principal more quickly, thus allowing a more efficient re-deployment into new investment opportunities, which is a feature that increases in importance during inflationary times. Arzan Wealth remains committed to its mission of providing high quality advisory services to its clients to diversify their international portfolios in a wise and cautious manner. The primary objective of Arzan Wealth is to preserve the wealth of its clients, to offer safety and regular income, and to achieve greater diversification in mature global markets.”
About Arzan Wealth (DIFC) Limited
Arzan Wealth is an investment advisory firm registered at the Dubai International Financial Centre (DIFC), and is regulated by the Dubai Financial Services Authority (DFSA). Arzan Wealth currently advises various professional clients on real estate, private equity and other investments with a total value of assets advised around US$ 2.50 Billion. Arzan Wealth focuses on arranging yielding investments in major global markets, as well as bespoke investments that meet the requirements of specific clients. Past or projected performance is not necessarily a reliable indicator of future results. Arzan Wealth (DIFC) Limited accepts no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith
Head of Investment Operations