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Pelorus Fund

124 Tustin Ave. Suite 200 Newport Beach CA 92663



About the company

Pelorus is an asset-based lender that provides secured term loans, through a private mortgage REIT to a special class of property owners with cannabis use tenants who cannot obtain traditional real estate loans due to the dislocation of the capital markets caused by Federal Regulations.

Pelorus launched the Pelorus Fund in 2018 as a low-cost (1% management fee) diversified strategy of secured notes collateralized by real estate properties with personal/corporate guarantees from the sponsors.

The cannabis portfolio since 2016 represents 34 transactions with 11 payoffs. Pelorus has deployed $70M in the cannabis lending sector since 2016 and since that time has become a leader in lending to commercial properties with cannabis tenants.

The Pelorus Fund is delivering “near equity-like returns” by focusing on providing loans secured by commercial properties and allowing for cannabis-use tenants; we are non-plant touching.

Team

Market

The illiquidity of capital in the cannabis lending market has created and opportunity with inverted risk to yield ratios that is only seen in very rare circumstances, often created by political or other market forces that last for shorter periods of time. This opportunity allows us to lend to bank quality sponsors and assets with near equity-like returns.

Additionally, we only lend in States in which Medicinal Cannabis has been approved, which offers our borrower's tenants the maximum safe harbor protections offer by the Rohrabacher–Blumenauer Amendment. This Amendment prohibits the Department of Justice from using federal funds to prevent states with medical cannabis regulations from implementing laws that authorize the use, distribution, possession or cultivation of medical cannabis.

We expect the Federal agencies to deconflict the federal agencies with regard to cannabis banking within the next 18 to 36 months. Once the IRS, DEA, FDIC, and other various three-letter agencies are deconflicted the market will become more normalized and our loans will be paid off by lower costs loans. However, our focus will remain the value-add bridge lender market, which we have always successfully completed against institutional banking. This is because we can lend on completed values/stabilized values, which banks must use the cost basis, and move through underwriting to closing in days as opposed to the weeks or months intakes the banks.

Opportunity

The Pelorus Fund is focused on providing lower leverage loans 50% to 60% LTV secured by commercial industrial/warehouse type properties and allows for cannabis-related business tenants.

The Fund Manager shares income with the Fund Members and has a targeted yield of 15%. The Fund operates under the Department of Real Estate and the Department of Business Oversight and is audited by Armanino each year.

Mortgage REIT structure qualifies for a 20% Federal tax savings on income distributed to the Fund Members and cleanses UBTI for Self-directed IRA investors.

We switched from quarterly distributions to monthly distributions with last month at a 14.875% to our investors.

Financials

Investment details are reserved for those who have created a free investor profile and indicated that they are accredited.

Documents

Investment details are reserved for those who have created a free investor profile and indicated that they are accredited.

Risk disclosures

Investment details are reserved for those who have created a free investor profile and indicated that they are accredited.

For more videos, please visit the Pelorus Equity Group YouTube channel. 

Photos

Videos

INVEST

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