John Beacham, ceo and founder of Toorak Capital Partners, answers SCI's questions

Q: Toorak recently hit a US$10bn milestone in whole loan funding for housing rehab and construction since its inception in 2016. What does this mean to your company? 
A: We’re extremely proud of hitting this milestone and excited for many more to celebrate in the future. When we first started Toorak, we saw an opportunity to provide stable, long-term capital to a fragmented industry, as well as the opportunity to address the national housing shortage by enabling investors to bring units to the market. It’s been a great reward to see the outcomes of our vision unfold, a validation of our business approach, and a testament to our team and their talent and hard work. 

Q: Your company has funded more than 26,000 small-balance business-purpose loans secured by residential, multifamily and mixed-use properties across the UK and the US. What have been the challenges of funding the loans enabling this work? 
A: This is a very data-intensive business and we’ve closely scrutinised the details of every loan. As with any business, there has been stress on our processes and a need for flexibility to handle expected market challenges, as well as unexpected challenges, such as Covid.

With news surrounding the market changing on a daily basis, it can be hard to account for every possible scenario. Thankfully, Toorak has built a recession-resistant model that allows us to remain in ‘business as usual’ mode and continue to flexibly work with our partners. Toorak relies on multiple sources to fund loans and has been able to consistently provide capital through conservative credit standards, close review of construction deals, deep understanding of local markets, materials pricing, and a focus on higher experienced customers.  

Q: Talk us through your focus on new geographies and products.
A: As part of our commitment to finding a solution to the nation’s housing shortage, we work with loan originators around the country and now serve the continental US and the UK. We began by offering a short-term bridge loan product and then expanded into long-term investor loans to best meet the needs of our partners.

We also offer ground-up and intermediate term loans. As we work with our partners, we’ll continue to adjust our product offerings. 

Q: What has been your biggest achievements this year?
A: I was extremely excited to have been named an EY Entrepreneur of The Year 2022 New Jersey Award winner. It was a recognition of the successful business model we’ve built at Toorak and a true reflection of all the hard work our company has done, the grit of our borrowers, the success of our lending partners and the social good that our industry does every day, improving, creating and financing housing to provide quality places for families to live. 

Q: What is in the pipeline for Toorak for 2023?
A: As we move into 2023, we look forward to continuing to see the impact of our work as it relates to improved and affordable housing and plan to keep this as a main pillar to the core of our work. We will also continue to build out our securitisation programme and look to support our originator partners, so they can flexibly provide capital to their borrowers. We’re proud to close out 2022 with a bang and are excited to see what 2023 must bring for Toorak Capital Partners. 

Q: What is your view of the market for the coming year?
A: While recent news in the housing market has focused on rising prices and rental costs, the US continues to suffer a severe housing shortage. While other subsets of the market may be cooling with mortgage and interest rates increasing, a solution needs to be achieved with both ground-up construction, as well as rehabilitation and conversions of existing properties.

Toorak has been consistently funding the loans enabling this work since 2016 – which, in turn, is aiding this niche of the market to continue their work. The market will continue to remain challenging as the Fed hikes interest rates. 

Angela Sharda