The Equity and Debt Markets Are on Fire. Here's Why.
Summertime, and the lending is easy. Construction is starting to pick up and money is still cheap, which makes it an exciting time for commercial real estate lenders. We'll hear from some of the top players at Bisnow's LA Capital Markets Summit, Tuesday, June 30, at the Intercontinental Century City, starting at 8am.
Among our panelists will be George Smith Partners principal Steve Bram, who tells us the traditional summer slowdown hasn't materialized. The firm's closed two deals over $100M so far this year, and is doing large land loans in places like Reno, NV; Park City, UT; and Boston. Many of the real estate investment banking firm's clients are calling and saying now's the time to pay off their loans and lock in new 10-year loans, he says, because they think rates are going to go up. GSP, founded by the late commercial mortgage guru George Smith, recently elevated three of its loan originators to principals.
Another panelist will be Realty Mogul SVP Phil Block, who runs the new commercial lending group at the real estate crowdfunding and peer-to-peer real estate marketplace. The online origination platform, which offers bridge, perm, private money and equity, has built tremendous traction since launching in April and recently announced $250M in commercial loan commitments. Phil says they can handle loans from $1M up and can go up to 97% of the capital stack on small balance transactions.
We'll also hear from Fundrise VP of real estate Ryan Granito. Based in LA and San Diego, Ryan tells us his primary role at the crowdfunding company is sourcing new deals to finance. The firm just closed another deal on the West Coast, providing $1.2M of preferred equity for a ground-up multifamily development in Koreatown (sourced through George Smith Partners). According to Ryan, Fundrise is focused on growing its presence in the SoCal market with the goal of funding four or five deals every month. The firm's seeing a lot of activity, he says, because it delivers a unique product that is a better fit for real estate developers and provides certainty of execution. The company has funded over $50M to date and expects to double that amount through Q2 of this year.
Another panelist you won't want to miss is OneWest Bank EVP Scott Shepherd, who tells us the regional, privately held bank has been originating commercial loans out of SoCal for about four years and issued some $3B in commitments. Typical deals have been in the $15M to $40M range on a single asset, though it's done portfolio deals as large as $150M. The bank focuses on non-recourse bridge loans for transitional properties in the multifamily, office, retail, industrial and hotel sectors, and demand for this product hasn't waned. Last year, OneWest entered into a merger agreement with CIT Group. Scott notes CIT does construction lending, something OneWest currently does not. Join us on June 30 for Bisnow's Capital Markets Summit, starting at 8am at the Intercontinental Century City, 2151 Avenue of the Stars. Sign up here.
