Basalt Capital LLC is an investment advisory and asset management firm specializing in commercial mortgage backed securities for institutional investors.
Basalt empowers research, technology and risk management systems to support their foremost objective of capital preservation.
Fred Fellows manages Basalt’s operation. In the last twelve months alone, Basalt has sourced, underwritten, priced and purchased for Basalt and others over $200 million of high yield CMBS.
Fellows has spent the last 30 years in commercial real estate, primarily within the capital markets and structured finance. Fred draws upon broad relationships developed from executive positions at CB Richard Ellis (80s), Nomura Securities(90s), Cargan Capital, and Southwest Securities (00s).
Basalt utilizes proprietary underwriting models, distinct in property type, geography and collateral characteristics.
Underwriting includes cash flow analysis, sponsorship, documentation and asset specific influences such as micro market trends and additional financing. Cash flows are underwritten from historical financials, current market rents and projected stress of income and expense changes.
Market analysis includes employment and demographic trends, a short market narrative and current construction underway and planned.
Basalt identifies risk and quantifies relative value by evaluating term and balloon default risk from asset underwriting including financial market influences of higher interest rate conditions and wider mortgage financing spreads.
Subjective Interpretations
1. Street Research
2. Rating Agency Research
3. Market Pipeline
4. Investment Pipeline
5. CRE Firms Research
Analytics
1. Proprietary Modeling
2. Realpoint
3. Trepp
4. PPR
5. Bloomberg
6. Primary Broker Dealers
7. Rating Agencies
Relationships Provide Opportunities
Basalt has broad relationships and a broad network to access assets, research and other unique resources.
These include relationships with major and minor issuers of real estate debt securities augmented by on-going dialogue with a vast number of smaller, regional players that tend to find investment opportunities that are often priced and sold on an off-market basis for various reasons.
Broad Reach
- Primary Broker Dealers
- Secondary Broker Dealers
- Transition Firms
- Investment Bank Lenders
- Commercial Bank Lenders
- Specialty Finance Companies
- Friendly Fire Investors
- Syndication Groups
Valuable Basalt Focus :
- Established and Unique Access to Assets.
- Established and Proprietary Underwriting models.
- Established, Risk Adjusted Pricing approach.
Experience = Wisdom
Risk Evaluation Includes:
Cash Flow Volatility
Collateral Underwriting
Market Analysis
Leverage Analysis
Structural Analysis
Related Party Analysis
Relative Value Analysis
Exit Analysis
HY CMBS Fund Experience
Fred Fellows’ first CMBS fund was launched in January 1999, Cargan CMBS Investments LP. Figuratively speaking, the stars were aligned for us to access assets yielding high, risk-adjusted returns primarily due to our unique expertise.
Fred Fellows directed this unique expertise (access, underwriting and pricing) toward investing thoughtfully in higher yielding commercial mortgage backed securities.
Expectations were for the market to stabilize, spreads to compress and underlying collateral to appreciate. By 2001 these factors were realized, however continued progress was not supported by our conservative technical analysis, and therefore a second fund was not pursued.
Targeted returns were 18% and were exceeded to return 21% to investors.
Fellows established a "prop trading" desk and enjoyed an extraordinary track record generating profits on each and every position acquired over nearly seven years at SWS.
PetCure was formed in 2015 with seed capital and the support of Basalt Capital.
Pathway Vet Alliance acquire PetCure in December 2020.
PetCure Oncology is a leading veterinary cancer treatment provider in the United States and is revolutionizing the way pet cancer is treated using proven technology from the human oncology field, stereotactic radiosurgery (“SRS”). SRS allows the Company’s board-certified veterinary radiation oncologists to precisely target tumors in pets using large doses of radiation delivered with sub-millimeter accuracy over a very short period of time. The result is far fewer side-effects, excellent tumor control and far fewer anesthetic events for pets (reduced from 20 to 3 or fewer).
The market and specifically pet owners have responded well to the PetCure Oncology service offering as awareness and adoption have continued to increase over time.
This market opportunity coincides with the “humanization of pets” as pet related products and services are experiencing unprecedented year over year growth, a trend that is projected to continue.
Over 12,000,000 pets are diagnosed with cancer every year, while a fraction of these pets have access to meaningful treatment options caused by the lack of oncology specialists supply and treatment technology.
PetCure Oncology management believes that the addressable market for the Company’s services exceeds 400,000 pets per year when accounting for ability to pay, age of pets and propensity to treat.
The business plan calls for capturing around 300 of these cases per location, or nearly 8,000 per year across the platform once the Company reaches 25 locations. This projection highlights the significant opportunity that the market presents as the 8,000 treated patients will represent only a 2% market share.
Founded in 2014, the Company has treated over 2,700 pets to date at PetCure Oncology facilities which are geographically dispersed across the United States (New Jersey, Arizona, California, Wisconsin, Pennsylvania and Florida). Treatment data on all 2,700 pets has been documented and this data will form the foundation of evidence based research, the intent of which is to prove the efficacy of SRS as a world class treatment option. The Company believes that this published research will tip the market in favor of the SRS treatment option and drive increased acceptance of the Company’s treatment options.
With new locations in the pipeline, the Company intends to expand operations to 25 high-value markets to allow greater access to pet owners who could benefit from SRS through PetCure Oncology’s radiation oncology specialists. The Company, led by a leadership team with decades of cancer industry experience, completed its fourth fiscal year of operation having made significant operational, financial, clinical and marketing progress. Treatment volumes have continued to grow year over year through new location launches and same store growth, up 34% from 2017 to 2018. The systems and platforms upon which PetCure Oncology is built provides a strong foundation for clinical, operational
and marketing growth and scale.
Investment in the veterinary industry continues to be very active, fueled by favorable market macros, growth in veterinary spending, humanization of pets, cash payment by customers and client demand for advanced treatment options. Private equity firm investments have fueled the explosion of enterprise valuations for pet related companies in recent years and specifically within PetCure Oncology’s market sector, veterinary specialty medicine.
Basalt Capital invested and arranged $17 million of joint venture equity.
Nob Hill Apartments is a mid-rise apartment community and is the largest and most preferred apartment community on southern side of Syracuse, NY.
Nob Hill was acquired by Sinatra and Company Real Estate in 2018, for $58.5 million, with $8.217 million ($10,798 /unit) funded for the capital improvement of the property and units. To date the renovated units have been able to command over 150% of planned rental increases.
Completed between 1969 and 1974 in multiple phases, Nob Hill consists of 761 units ranging between 640 and 1,388 square feet in four Buildings. The Property consists of one to three-bedroom units ranging from 640 sf to 1,388 sf, with an average size of 828 sf housed in concrete and steel construction.
Located on 27.6 acres that afford residents with views of downtown Syracuse and the surrounding countryside, Nob Hill is positioned strategically in the market, offering residents quick access to I-81 and I-481. Nob Hill is the largest and preferred community on the south side of Syracuse, with a critical mass not achieved by any other property in the market.