Hard Assets Draw Capital as Financing Costs Stay High
Long-duration property and infrastructure contracts are attracting fresh capital, while lenders are demanding rich returns and stronger collateral.
Coverage: 10 of 20 companies in this theme (REFI, FRHC, BDN, BFH, WSR, TCBK, CLSK, SLNH, SEZL, CPSS) — a sample, not the full set.
Chicago Atlantic Real Estate Finance (REFI) put the week’s clearest financial signal into one transaction: capital remains available for hard assets, though borrowers must pay heavily for it. The company exchanged 4.3 million shares valued at $14.53 apiece for about $62.5 million of second-lien notes secured by 32 cannabis retail properties, gaining a 10% cash coupon, 2% payment-in-kind interest and a 2.5-times exit fee over a roughly 12-year weighted average maturity.
The long tenor gives Chicago Atlantic years of contracted income, while the cash coupon, accrued interest and exit economics compensate it for taking a junior position in a specialized property market. The financing also uses newly issued equity to expand earning assets, limiting the immediate need for additional borrowing.
CleanSpark (CLSK) pursued the same preference for durable contracts on a much larger scale. Its 20-year triple-net lease with a high-investment-grade global technology company at the Sandersville, Georgia, campus is expected to produce about $6.6 billion of initial-term revenue and average annual net operating income of roughly $330 million. The triple-net structure places property expenses with the tenant, supporting a clearer path from contracted rent to CleanSpark’s operating income.
That relationship could extend across CleanSpark’s entire Texas portfolio, where the tenant signed a letter of intent and exclusivity arrangement covering 885 megawatts of secured and planned power capacity. Soluna Holdings (SLNH) is moving toward a similar conversion of powered sites into contracted capacity: one prospective Project Kati 2 tenant signed a letter of intent and advanced into formal commercial negotiations.
Existing utilization strengthened that infrastructure case. Soluna kept Projects Dorothy 1A, 1B and Dorothy 2 at full capacity in June despite greater curtailment during the 4CP period, while every customer at Project Sophie operated at full capacity. Full customer utilization and progress toward another tenant give Soluna a firmer base for turning power access into recurring revenue.
Elsewhere, companies raised liquidity against both assets and equity. Consumer Portfolio Services (CPSS) renewed its Citibank revolving agreement for two years and expanded capacity to $508 million from $335 million, with automobile receivables securing the facility. Freedom Holding (FRHC) raised nearly $300 million through a Regulation S sale of 2.37 million common shares.
Brandywine Realty Trust (BDN) took the asset-sale route, disposing of an Austin office building and parking garage for $151 million and receiving about $146.1 million in net proceeds. Across this week’s transactions, valuable property, receivables and long-term tenant commitments supplied the strongest routes to capital, and the price of weaker collateral remained explicit.