Redwood Trust buying real estate investment loan originator 5 Arches

Last year, Redwood Trust, a real estate investment trust that specializes in buying and securitizing jumbo mortgages, grew its real estate investor loan business when it acquired a 20% stake in 5 Arches, an originator and asset manager of investor-focused loans. As part of the deal, Redwood Trust had the right to purchase the remaining 80% of 5 Arches within one year. And now, Redwood Trust plans to do just that. Redwood Trust announced Tuesday that it plans to exercise its option and purchase the remainder of 5 Arches for $40 million. The REIT’s payout for its original 20% state was $10 million.