Fund Brief — February 2026
Nectar Fund II.
Mid-Market Mezzanine & Preferred Equity.
A diversified portfolio of preferred-equity and cash-flow-assignment positions in stabilized small-balance commercial real estate. Sourced directly from the Nectar Fund II Investor Deck — see the Fund Terms page for share class economics, or the Track Record with the Fund filter set to "Nectar Fund II" for the deal-by-deal view.
Investment Highlights
Six Numbers That Define the Strategy
$50M+
Capital Deployed
Since 2021
93
Active Investments
42 full-cycle deals
61%
Wtd. Avg. CLTV
Conservative positioning
1.32x
Wtd. Avg. DSCR
Strong debt coverage
100%
Distribution Record
Since inception
14%+
Target Net Returns*
Unaudited
*Target returns are unaudited. Audited realized returns will be available upon completion of the annual fund audit.
The Opportunity
The Structural Capital Gap
$2.8T in CRE maturities (2024–2028)
Bank retrenchment in sub-institutional lending
Institutional capital minimums typically $10M+
Nectar focuses on the $100K–$5M capital gap for stabilized, cash-flowing operators with meaningful equity in place — a segment that institutional capital has structurally vacated.
Founded: 2021 | Headquarters: Atlanta, GA
SEC Registration: Regulation D, Rule 506(c)
Legal Counsel: Nelson Mullins Riley & Scarborough LLP
Auditor: CBIZ MHM, LLC
Key Metrics
$50M+
Total Capital Deployed
6,951+
Asset Units in Portfolio
29
States with Active Positions
100%
Perfect Distribution Record
Investment Strategy
Five Operating Principles
Every position in the fund must satisfy all five principles before capital is committed.
01
Provide liquidity to experienced operators
10+ year track records, $50M–$500M portfolio sizes, asset-rich balance sheets. Capital fills a working-capital gap rather than a distress hole.
02
Collateralized by equity stakes and income streams
Preferred equity positions amended into the operating agreement, plus assignment of property operating cash flows for continuous debt service coverage.
03
Stabilized properties with 12+ months operating history
No construction risk, no lease-up risk. 85%+ occupancy at funding. Cash flow is observable and underwritable, not projected.
04
Sub-70% senior LTV profile
Meaningful equity cushion below the Nectar position. Portfolio-weighted CLTV of 61% leaves room for adverse value movement before principal is at risk.
05
Focus on workforce and naturally occurring affordable housing
Multifamily in top-100 MSAs, 1970s–early-2000s vintage. Rent levels track local wages, which historically smooths cash flow through cycles.
Target Profile
Who and What We Underwrite
Typical Borrower
Operating experience10+ years
Portfolio size$50M–$500M
Balance sheet profileAsset-rich, cash-flowing
Avg. Sponsor AUM$286M
Typical Asset
Unit count50–200 units
GeographyTop-100 MSA
Vintage1970s–early 2000s
Occupancy at funding85%+
Underwriting Framework
Four Pillars, Quantified
1
Sponsor Quality
Track record, financial capacity, AUM verification, operational capability
2
Asset Cash Flow
DSCR analysis via Plaid, physical inspection, environmental and legal review
3
Equity Cushion
CLTV ceiling <80%, 12+ months stabilized history, 85%+ occupancy
4
Structure & Enforcement
Capital stack design, covenant negotiation, lien confirmation, reserve establishment
| Portfolio Metric | Nectar Portfolio | Industry Avg. |
|---|
| Average CLTV | 61% | 75–80% |
| Average DSCR | 1.32x | 1.2x |
| Minimum Occupancy | 85%+ | No standard |
| Funding Timeline | 7–10 days | 60–90 days |
Structural Protections
Five Layers Between Investor Capital and Loss
Each protection acts independently — a failure in any single mechanism is recoverable through the others.
01
Personal Guaranty
High-net-worth sponsors ($50M+ net worth typical) provide full personal recourse on all positions.
02
Preferred Equity Position
Amended operating agreement with unrestricted power of attorney to sell assets upon default.
03
UCC-1 & Springing Lien
Filed security interest in the GP entity plus a springing lien on real property triggered upon borrower default.
04
Payment Reserves
3+ months of principal and interest payments held in escrow by Nectar as an immediate liquidity buffer.
05
Cash Flow Assignment
Direct assignment of property operating cash flows for continuous debt service coverage.
Layered structural protection with no single point of failure.
Capital Stack Position
Between Meaningful Sponsor Equity and Conservative Senior Debt
Sponsor Equity35–50%
Nectar Position5–10%
Senior Mortgage45–55%
Preferred Equity & Cash Flow Assignments
Performance Track Record
Realized Outcomes Since Inception
<1%
Cumulative Default Rate
$0
Realized Principal Losses
Year-over-Year Growth
2021 → 2022100% growth
2022 → 2023750% growth
2023 → 2024191% growth
Portfolio Health
Avg. Weighted CLTV61%
Avg. Weighted DSCR2.2x
Delinquency Rate3.4%
Cumulative Default Rate<1%
*Target returns are unaudited and reflect internal calculations. The fund has not yet completed an independent performance audit.
Representative Originations
Three Live Positions, Click to Inspect
Each card opens the deal's one-pager in the dashboard's modal — where you can see funding history, current balance, and underwriting context.
Penn Garden Apartments
Pennsauken, NJ
Units116 Units
Use of FundsFund Capital Improvements
CLTV50.5%
DSCR1.70x
Occupancy99%
Rent Growth+41.4%
Units100 Units
Use of FundsFund additional Acquisition
CLTV55.6%
DSCR1.58x
Occupancy93%
Rent Growth+28.4%
Mary Lin Portfolio
Dayton, OH
Units88 Units
Use of FundsFund additional Acquisitions
CLTV69.1%
DSCRN/A
Occupancy98.8%
Rent GrowthStrong
Investment Vehicles
Summary of Fund Terms
Three ways to participate. The diversified fund offers exposure to the whole portfolio; promissory notes offer subordinated debt at a higher coupon; co-investments offer deal-by-deal selection.
| Term |
Nectar Fund II
Diversified Portfolio |
Promissory Notes
Subordinated Debt |
Co-Investments
Individual Deal Selection |
| Class A coupon / target IRR | 14% annually | 16% annually | 12–18% target IRR |
| Class A minimum | $500,000 | $250,000 | $100,000 per deal |
| Class B coupon | 12% annually | 14% annually | n/a |
| Class B minimum | $100,000 | $25,000 | n/a |
| Distributions | Quarterly | Quarterly | Monthly P&I |
| Lock-up / Term | 12 quarters | 3 years, renewable | Per deal |
| Liquidity | Quarterly after lock-up | At term | True sale / BK remote |
| Participation / Selection | Whole portfolio | Whole portfolio (debt) | Investor chooses, up to 90% |
| Servicer | Nectar | Nectar | Nectar |
| IRA eligible | Yes | No | Varies |
| Tax reporting | K-1 | 1099-INT | Pass-through |
Note: the dashboard's
Fund Terms page describes a different share-class structure (11% fixed / 8% pref + 80/20). Confirm which terms apply for your investment context before subscribing.
Operational Infrastructure
Institutional-Grade Counterparties
Legal Counsel
Nelson Mullins Riley & Scarborough LLP
Atlanta, GA
Auditor
HLB Gross Collins
Atlanta, GA
Calculation Agent
Finley
Third party verification
SEC Registration
Regulation D, Rule 506(c)
Accredited investors only
Fund Structure
Delaware LLC
Managed by RE Nectar, Inc.
Backup Servicer
Concord Servicing
Bankruptcy remote structure
Important Disclosures. This presentation is provided for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities are offered only to accredited investors pursuant to Rule 506(c) of Regulation D under the Securities Act of 1933, as amended. Past performance is not indicative of future results. All investments involve risk, including the possible loss of principal.
The information contained herein is based on data available as of the date of this presentation and is subject to change without notice. This material is confidential and intended solely for the use of the recipient.
Prospective investors should carefully review the Private Placement Memorandum (PPM) and related offering documents before making an investment decision. RE Nectar, Inc. does not provide legal, tax, or accounting advice.
Target returns and projections contained herein are based on internal estimates and assumptions that may not be realized. Actual results may differ materially from these projections. The fund has not yet completed an independent performance audit.
Third-party data and market statistics cited in this presentation are sourced from publicly available industry reports. While the fund believes these sources to be reliable, it has not independently verified all such information.
Legal Counsel: Nelson Mullins Riley & Scarborough LLP | Auditor: CBIZ MHM, LLC
Case Studies — Execution
What Good Looks Like
✓ Paid in Full
Minnesota Multifamily
$230M AUM sponsor · Affordable housing operator · 15+ years experience
StructurePreferred Equity
DSCR at Origination1.22x
CLTV at Origination71%
Total Collected$2,638,513
MOIC1.17x
Hold Period8 months
✓ Prepaid — capital returned ahead of schedule
✓ Workout — Full Recovery
Seattle SFR Portfolio
Vacation rental operator · $13M asset value · 12 assets
DSCR at Origination1.72x
CLTV at Origination49%
Total Collected$985,124
MOIC1.80x
OutcomeForced sale pre-foreclosure
Context3 assets entered pre-foreclosure
✓ Structural protections functioned as designed
Case Studies — Lessons Learned
What We Learned and How We Improved
Institutional managers learn from losses. Here is ours.
In December 2022 we funded a West Virginia SFR portfolio. The borrower defaulted in July 2023. After securing a judgment lien exceeding $1M plus attorney's fees, we conducted a full review of the portfolio condition and the sponsor's assets and determined that a negotiated settlement was the most efficient path to recovery. We settled in November 2025 for $350,000, bringing total collections to $538,571 against an initial advance of $859,970 — a loss of $321,209. Here is what it produced:
🔍
Check for NSFs
Insufficient fund events in a borrower's transaction history are a leading indicator of cash flow stress that traditional underwriting misses. We integrated a bank analysis platform that automatically processes all bank transactions and flags NSF frequency and patterns as part of our standard underwriting.
📡
Check for Adverse Media
Sponsor reputation risk is not always visible in financial statements. We implemented a structured search protocol to surface adverse media — litigation, regulatory actions, prior defaults, public disputes — related to every sponsor and property before we commit capital.
⚡
Own the Path to Recovery
Relying on court proceedings to reach an asset is slow, expensive, and uncertain. This experience directly led to our Springing Lien concept — a structural protection that gives us a pre-authorized path to the collateral without lengthy litigation. We also embedded the contractual right to sell in our agreements, replacing reliance on court orders with a direct enforcement mechanism.
These three protocols are now standard in every Nectar underwriting. Every deal originated after Q1 2023 includes NSF screening, adverse media review, a springing lien, and contractual sale rights. The West Virginia position represents 0.4% of total capital deployed and 100% of our unrecovered principal.
The Opportunity — Market Dynamics
The Case for Small Balance Preferred Equity — Now
A supply correction, a credit market reset, and a structural gap that large institutions cannot fill.
Part 1 of 3
Market Conditions Have Fundamentally Shifted
⬇ Where We Were
Peak Asset Pricing
Values inflated by a decade of rate suppression
Supply Glut
Highest new deliveries in a generation hitting simultaneously
Valuation Reset
Sharpest price correction in over a decade — asset values compressed across CRE
Credit Contraction
Banks tightening — limited refinancing options, preferred equity at 20%+
⬆ Where We Are Now
Price Correction Complete
–14% from peak (NCREIF NPI). Values recovering from a real, measurable bottom
Supply Collapsed
New starts down 74% from peak. All 16 biggest markets past peak deliveries
Valuations Recovering
Price correction complete — asset values stabilizing and beginning to recover
Credit Loosening
Cash-out refinancings viable again for strong operators. Banks re-engaging
Key Market Indicators — Peak vs. Today
Indexed to 100 at peak conditions
Sources: NCREIF NPI Index via Bloomberg · CBRE Research / CBRE Econometric Advisors
Part 2 of 3
Supply Absorption Without a New Wave Behind It
The supply overhang is working through the system. Once absorbed, there is no comparable pipeline behind it — starts collapsed under higher rates and construction costs. With demand supported by household formation and limited ownership affordability, the setup for rent appreciation and price recovery is compelling.
Multifamily Supply Cycle — Deliveries vs. Starts
Annual units (thousands), illustrative of national trend
WHERE WE ARE IN THE CYCLE
The window between supply absorption and the next construction wave is the optimal deployment environment for preferred equity. We are in the second phase.
PHASE 1
Peak Supply
Record deliveries hit simultaneously. Vacancy rises. Rent growth stalls. Asset prices compress.
PHASE 2
Absorption
Excess supply being digested. New starts collapsed –74%. Stock tightening. Rent growth stabilizing.
WE ARE HERE
PHASE 3
Supply Gap
No comparable pipeline behind it. Structural undersupply forms. Vacancy compresses. Pricing power returns to operators.
PHASE 4
Rent Appreciation
Tight supply + demand growth → sustained rent appreciation and asset value recovery across CRE.
Sources: CBRE Research / CBRE Econometric Advisors · NCREIF NPI Index via Bloomberg
Part 3 of 3
A Once-in-a-Generation Entry Point
Corrections of this magnitude are rare. Deploying preferred equity into this environment means lending against assets purchased at or near the bottom — with recovery tailwinds, not headwinds.
–14%
Asset prices bottomed
NCREIF NPI peak-to-trough correction from Sept 2022 peak. Values rebounding from a real, measurable correction.
–74%
Supply pipeline collapsed
New multifamily starts down sharply from peak. All 16 biggest supply markets past peak annual deliveries. The next wave is not coming.
2–3 yr
Window before supply returns
New construction takes 24–36 months to deliver. The supply gap is structural and will persist until at least 2028–2029.
U.S. Commercial Real Estate Values — Historical Index, 1978–Present
Indexed to 100 at 1978. Every major correction was followed by a sustained recovery. We are deploying capital at the arrow.
Sources: NCREIF NPI Index · MIT/CRE Transaction-Based Index · Green Street CPPI
U.S. Multifamily Construction Starts — Historical Trend, 1978–Present
New starts have collapsed to levels not seen since the early 1990s. The last time this happened, a decade of rent growth followed.
Sources: U.S. Census Bureau · CBRE Research / CBRE Econometric Advisors
The Opportunity — Where We Operate
The Sub-$10M Preferred Equity Gap
Institutional quality collateral. Institutional complexity. But not institutional check sizes — which means institutions mostly aren't here.
| Dimension | Institutional Pref Equity | Nectar Small Balance |
|---|
| Deal size | $10M+ | Sub-$10M |
| Typical yield | ~10% | 12–16% target |
| Current pay | ~4–6% | ~6–8% |
| Accrual | ~4–6% | ~6–8% |
| Competition | High | Low — institutional gap |
| Deal complexity | High | Equally high |
| Institutions active | Yes | Rarely |
| Speed to close | Months | Days or weeks |
| Nectar advantage | N/A | Technology + Distribution |
The yield differential is not a function of lower collateral quality. Sub-$10M preferred equity deals carry the same complexity — the same diligence, the same legal structure, the same sponsor underwriting. Institutions decided that complexity is not worth a $2M check when they can deploy $20M elsewhere. That creates a persistent structural gap. We built the process infrastructure to serve it efficiently and at scale.
Our Footprint — 29 States, 144 Positions
84
Multifamily positions
Core asset class. Experienced operators, affordable and workforce housing focus.
29
States
Geographic diversification reduces concentration risk. No single market exceeds 15% of deployed capital.
Sub-$10M
Every position
Strict focus on the size segment where our speed and process infrastructure create a structural advantage.