Velocity Financial Expands Lending With $3.2B Toorak Deal

Velocity Financial is making a major expansion into residential investment lending through its planned acquisition of Toorak Capital’s operating platform, as per Globe St. The platform and related portfolio transactions were valued at an estimated $3.2B as of June 30. The deal would expand Velocity across multifamily, single-family rental, transition, and construction lending.

Velocity Financial Adds Lending Scale

Velocity agreed to acquire the operating platform of KKR’s Toorak Capital. It also plans to buy Toorak’s business-purpose loans and existing properties with a third-party investment company. The purchase price for the operating platform was not disclosed. Toorak’s business-purpose loans have about $3B of unpaid principal. 

The portfolio includes multifamily transition loans, short-term single-family debt, long-term rental-property financing, and ground-up construction loans. The operating business includes Merchants Mortgage & Trust Corp., Toorak’s US and UK lending, and direct US origination.

The Details

Velocity expects the acquisition to increase its servicing platform by 39% and originations by 76%. The Westlake Village, California-based lender also expects stronger returns on equity and earnings. Management projects the transaction will be accretive to GAAP earnings in 2027. 

Toorak had about 280 employees as of June. Since 2016, it has funded nearly 43,000 loans totaling $20B. CEO Chris Farrar said the acquisition is intended to expand Velocity’s reach in lending segments where the company sees durable long-term demand.

Why It Matters

The transaction would give Velocity a much larger origination and servicing footprint without building each lending channel internally. It also broadens the company’s exposure across several residential investment strategies. 

The portfolio includes multifamily transition loans, rental-property debt, and ground-up construction financing. That mix gives Velocity access to borrowers with different duration and property needs. Toorak’s existing team and platform are expected to remain central to the combined operation rather than being folded into a single lending product.

What’s Next

Velocity expects the operating-business acquisition to close during the final three months of 2026, subject to customary conditions. If completed, Toorak would become a subsidiary of Velocity Commercial Capital. 

Toorak would continue controlling its lending segments, including the Merchants brand. The company also plans to retain its Tampa, Florida headquarters. Investors will then be able to assess whether the projected 39% servicing increase and 76% origination increase translate into the expected earnings benefits in 2027.