National Lenders - The Unicorn in the room or is it?

Question

Hey BP,

I'm gathering financing options for my first MFH (6 or 7 plex) purchase.

I've used both conventional and portfolio lending up till now, and feel comforable with it.  However, I heard Jeff Greenburg mention that he was able to find lower rates using "National Lenders" vs. Portfolio money, in reference to commercial/multifamily properties.

I'm curious about how to go about seeking out these mystical "National Lenders"

I feel like this knowledge may provide me more options in terms of finding competitive loan options?

I'd really appreciate anyone who could decode the meaning here and help me understand what I'm missing.

Jeff Greenberg · Answer

Mortgage brokers know what lenders will lend on.  They will be able to go out to their nation wide sources to fund the deal.  Certain lenders may loan in certain region, loan size, property type, stabilization level, etc.  The larger the loan size, the more options you will have to find a lender.  It doesn't take any more work for a lender to lend 10,000,000 then to lend 500,000, but since they are working on a percent basis guess what they would rather do.

National Banks

Capital Groups

Credit Unions

This is an old list, but I hope this gives you the general idea.  They all have there own requirements and rules.

1. Wells Fargo Financed in 2011: $43.66 billion 420 Montgomery St. San Francisco, CA 94104www.wellsfargo.com/realestate Officers: Mark Myers, Head of Commercial Real Estate; Ed Blakey, Head of Specialized Lending - Real Estate

2. PNC Real Estate Financed in 2011: $11.01 billion 249 Fifth Ave. Pittsburgh, PA 15222-2707 PH: 877.762.7775www.pnc.com/realestate Officers: Jim Rohr, Chairman & CEO; Bill Demchak, Vice Chairman

3. MetLife Financed in 2011: $11.00 billion 200 Park Ave. New York, NY 10166 PH: 212.578.2211 www.metlife.com/realestate Officers: Robert Merck, Senior Managing Director, Real Estate Investments; Mark Wilsmann, Managing Director, Real Estate Investments

4. Prudential Mortgage Capital Co. Financed in 2011: $9.70 billion 100 Mulberry St., 8GC4 Newark, NJ 07102 PH: 888.263.6800www.prumortgagecapital.com Officers: David Twardock, President5. J.P. Morgan Financed in 2011: $8.00 billion 383 Madison Ave. New York, NY 10179www.jpmorgan.com Officers: Jamie Dimon, CEO - J.P. Morgan Chase & Co.; Jes Staley, CEO - J.P. Morgan Investment Bank

6. Strategic Alliance Mortgage (SAM) Financed in 2011: $7.60 billion 7100 East Pleasant Valley - Ste. 350 Cleveland, OH 44131 PH: 216.328.9700www.samalliance.com Officers: F. Brock Walter, President; Dennis Bernard, Vice President

7. KeyBank Real Estate Capital Financed in 2011: $7.29 billion 127 Public Sq. Cleveland, OH 44114 PH: 888.539.2221www.key.com Officers: EJ Burke, Executive Vice President & Head of Key Bank Real Estate Capital; William Hipp, Executive Vice President & Head of Institutional Real Estate & Health Care

8. CBRE Group Inc. Financed in 2011: $6.14 billion 11150 Santa Monica Blvd., Ste. 1600 Los Angeles, CA 90025 PH: 310.405.8900www.cbre.com Officers: Brett White, CEO; Robert Sulentic, President

9. Northwestern Mutual Financed in 2011: $4.51 billion 720 E. Wisconsin Ave. Milwaukee, WI 53202 PH: 414.665.2457www.northwesternmutualrealestate.com Officers: David Clark, Senior Vice President Real Estate; Mike Cusick, Managing Director - West

10. Cornerstone Real Estate Advisers Financed in 2011: $4.00 billion One Financial Plaza Hartford, CT 06103 PH: 860.509.2219www.cornerstoneadvisers.com Officers: David Reilly, CEO; Mark Higgins, President

11. Berkadia Financed in 2011: $3.91 billion 118 Welsh Rd. Horsham, PA 19044 PH: 800.446.2226www.berkadia.com Officers: Hugh Frater, CEO; Randall Jenson, President & CFO

12. NorthMarq Capital Financed in 2011: $3.77 billion 3500 American Blvd. W., Ste. 500 Bloomington, MN 55431 PH: 952.356.0080www.northmarq.com Officers: Jeff Weidell, President; William Ross, President

13. CWCapital LLC Financed in 2011: $3.67 billion One Charles River Pl. Needham, MA 02494 PH: 781.707.9300www.cwcapital.com Officers: Michael D. Berman, CMB, President & CEO; Donald P. King, Managing Director - National Fannie Mae & Freddie Mac

14. Red Mortgage Capital LLC Financed in 2011: $3.66 billion Two Miranova Pl., 12th Fl. Columbus, OH 43215 PH: 800.837.5100www.redcapitalgroup.com Officers: Mark C. Beisler, Chairman & CEO; Kenneth H. Bowen, President

15. Walker & Dunlop Financed in 2011: $3.22 billion 7501 Wisconsin Ave., Ste. 1200E Bethesda, MD 20814 PH: 301.215.5500www.walkerdunlop.com Officers: William M. Walker, Chairman & CEO; Howard W. Smith, COO

16. Natixis Real Estate Capital LLC Financed in 2011: $3.11 billion 9 W. 57th St., 36th Fl. New York, NY 10019 PH: 212.891.5700www.re.natixis.com Officers: Gregory A. Murphy, Managing Director; Mitch Karig, Vice President

17. Red Mortgage Capital LLC Financed in 2011: $2.65 billion Two Miranova Pl., 12th Fl. Columbus, OH 43215 PH: 800.837.5100www.redcapitalgroup.com Officers: Mark C. Beisler, Chairman & CEO; Kenneth H. Bowen, President

18. Pacific Life Insurance Co. Financed in 2011: $2.63 billion 700 Newport Center Dr. Newport Beach, Ca 92660 Officers: James Morris, CEO; Khanh Tran, President

19. Grandbridge Real Estate Capital Financed in 2011: $2.47 billion 200 South College St., Ste. 2100 Charlotte, NC 28202 PH: 704.332.4454www.gbrecap.com Officers: Thomas S. Dennard, CEO; David A. Roberts, CMB, President & COO

20. Citi Community Capital Financed in 2011: $2.29 billion 390 Greenwich St., 2nd Fl. New York, NY 10013www.citicommunitycapital.com Officers: Hal Kuykendall, Managing Director; Steven Fayne, Managing Director

21t. Starwood Property Trust Financed in 2011: $2.10 billion 591 W. Putnam Ave. Greenwich, CT 06830 PH: 310.893.2777www.starwoodpropertytrust.com Officers: Boyd Fellows, Director & President; Warren de Haan, Chief Originations Officer & Managing Director

21t. Beech Street Capital Financed in 2011: $2.10 billion 7600 Wisconsin Ave., Ste. 800 Bethesda, MD 20814 PH: 855.933.6667www.beechstcap.com Officers: Alan Fishman, Chairman; Grace Huebscher, President & CEO

23. ING Investment Management Financed in 2011: $2.02 billion 5780 Powers Ferry Rd. NW, Ste. 300 Atlanta, GA 30327 PH: 770.690.4600www.inginvestment.com Officers: Jeff Becker, CEO, ING Investment Management US; Christine Hurtsellers, ING IM CIO, Fixed Income & Proprietary Investments

24. M&T Realty Capital Corp. Financed in 2011: $1.80 billion 25 South Charles St. Baltimore, MD 20201 PH: 800.737.2344www.mandtrealtycapital.com Officers: Tari Flannery, President; Arnold Smeenk, Group Vice President & National Production Manager

25. Principal Real Estate Investors Financed in 2011: $1.78 billion 801 Grande Ave. Des Monise, IA 50392 PH: 800.533.1390www.principalglobal.com Officers: Patrick Halter, Executive Director, Real Estate; Randy Mundt, President and Chief Investment Officer

Drew Mim Mack · Answer

If you remember @Jeff Greenberg said that the bank contacted his broker and then the broker came to him.  So, it wasn't him that sought out lending, it was his "relationship" with his broker that led to the deal.  Lean on your brokers or agents, ask if they know REI friendly banks or know properties that are REO's.  Jeff also talked about how it was a portfolio deal and completely in-house and he didn't even have to apply for the loan, he just provided his financial reports.  If I were you I'd listen to the podcast again.  The bank needed someone who had attractive financial statements and brought professionalism.  He was also a passive portfolio investor in 700+ units which impressed the banks.  This was a Bigger Pockets real estate success story that happened to be on a podcast.

Look for good deals that have unpaid taxes, under managed, etc.  If the bank views the property as a pain point and you have the ability to alleviate that pain then you got a shot.  Bring professionalism, a resume, impressive financials etc.  Consider upgrading to BP PRO so you can use the analysis tools and print property reports.  @Brandon Turner raves about the value of the financial reports that BP can create.  Check it out at www.biggerpockets.com/analysis.  As a member you get to try it out a couple of times for free.  Quick Tip: if you're going to upgrade to PRO, do it during a webinar because of all the perks you get.

Carlos Flores · Answer

I have a lender that will go as low as 1.5% over 3 mo LIBOR on multifamily, office, retail, self-storage, hotels, land with a plan, restaurants, car washes, and single tenant deals over $3MM.  However, you have to fit in a small box to qualify for that.  I have another that does non-recourse bridge loans on multi-tenant mf, retail, office and industrial.  Non-recourse bridge debt isn't common.  Those are only two examples.  There are all kinds of programs out there.  We work nationwide but as has been mentioned, your best debt solutions are going to be local or a with a lender that wants to work in a given market or has a charter to do so.  We closed over $250MM in CRE and Multifamily Loans in 2015.  I may be a little bias, but I think people should spend time finding deals and let the mortgage pros find the financing.

Samuel DeMass · Answer

Thanks for the replies!  Much appreciated.

@Jeff Greenberg, Could you spell out what you meant when you said "National Lender" on the podcast, in terms of the lowest common denominator (layman's terms)?

This is where my understanding is getting hung up and the root of my question.

Again, thanks for all the replies.

Corey Demuth · Answer

Jeff, which banks were able to offer those terms?

Copelon Kirklin · Answer

I wouldn't say it's mythical but what I would say is that it's not all that common @Samuel DeMass. What's ironic is that I just spoke to a banker today who's offering a loan product that caters to income-producing properties at bank rates. They're also not relying on credit and you can still possibly get rates in the 4s. Again, this is not all that common...but not mythical either.

Account Closed · Answer

Hi @Samuel DeMass - I run a commercial mortgage firm that works nationally. I'd be happy to learn more about what you're doing and discuss any potential scenarios with you (at no cost/obligation).

Carlos Flores · Answer

@William Kyle Walker Yes, nationwide.

William Kyle Walker · Answer

Hey Carlos,

Do you have a lender that will do non-recourse bridge loans on multi-tenant in Georgia?

Darryl Dahlen · Answer

What lender you use, and is BEST suited to the loan, is largely dictated by the loan amount. While a myriad of other factors come into play, the loan amount is a good litmus test as to which lenders might be better suited.Generally speaking, loans under 1MM are better suited to local banks and credit unions. That's where they lend all day long and are very comfortable. In reality, large(r) banks, CMBS, agency programs, and life companies, really don't have an appetite for small(er) loans.

That being said, most banks have a small balance commercial program (Wells has a great one), but not all banks are the same or are as competitive. A small to mid-sized bank is likely to be a better option than a national bank simply because a bank who only has branches in the market you are buying probably only lends in that market.

Most of the lenders that Jeff posted are Tier 1 lenders and won't have much of an appetite for your project unless the loan amount is large. This is coming from a guy who financed over 22MM last year in multifamily loans and uses some of those very lenders.

National Lenders - The Unicorn in the room or is it?

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