Peer Street, the Andreessen Horowitz-backed real estate debt platform that focuses on small loans, filed for bankruptcy protection on Monday in Delaware, citing assets and liabilities between $50 million and $100 million.
The company’s largest lending product, with $220 million in face value loans, had only 42 percent of the loans performing, according to an affidavit filed as part of the chapter 11 petition. [Peer Street affidavit]
The company holds debt in New York City on dozens of smaller properties, and has filed at least 28 pre-foreclosure cases in the city totaling $33 million since the middle of 2020, according to a PincusCo analysis of court records. Many of those cases have been discontinued.
The company, which uses alternate names such as PeerStreet and PS Funding, among others, plans to sell the loans, possibly in buckets depending on how they are currently performing, according to the filings.
According to the filing, “It is currently contemplated that there will be six Asset Pools as follows:”
The original loans for those New York City pre-foreclosure cases were between $381,500 and $2.85 million. Most of the borrowers were smaller owners, but a few were well known, including Yoel Goldman of All Year Management, at 119 Boerum Street and 15 Humboldt Street. (The 119 Boerum case was discontinued, but in the 15 Humboldt case the judge signed a judgment of foreclosure and sale in April 2023, but the auction date has not yet been set. Peer Street’s foreclosure filing identified Yoel Goldman as the guarantor at 15 Humboldt, though he was not the loan signatory.)
Peer Street, based in El Segundo, California, was founded in 2013 and calls itself, “the first two-sided marketplace for investing in real estate debt.”
According to the bankruptcy filing, “As part of the Debtors’ efforts to ensure that they secure a value-maximizing transaction for their Assets, in March of 2023 the Debtors retained Piper Sandler Loan Strategies, LLC, an experienced broker in the Debtors’ industry, to canvass the market for interested buyers. Through its mortgage industry experience, Piper has executed non-disclosure agreements (“NDAs”) with approximately 1,000 investor parties with interest in acquiring mortgage loan assets such as the Assets.”
According to the filings, “On the Petition Date, approximately $205.0 million in MPDNs [unsecured mortgage payment dependent notes] were outstanding. These notes are associated with approximately $220.2 million in face amount of Underlying Loans. Approximately $92.4 million of these loans were performing as of the Petition Date. PSFI also holds cash of approximately $18.5 million. In addition, another Peer Street affiliate, PSF REO LLC holds $1.2 million in cash and parcels of real estate that had previously secured approximately $37.1 million in Underlying Loans on the retail platform that have been foreclosed… On the Petition Date, approximately $41.4 million in RWNs [unsecured redeemable warehouse notes] were outstanding.”