Was it a sweet ‘16? Only for some of the industry’s powerhouses.
Most banks saw a decrease in lending activity last year, as did some of the larger institutional private funds. It was, undoubtedly, the year of the alternative lenders, who filled the construction and transitional debt void nicely, upping their originations significantly on the way. Life companies didn’t fall far behind and, in several cases, outperformed their 2015 figures.
#9 Brian Baker
Global Head of Commercial Mortgages at J.P. Morgan Securities
Last Year’s Rank: 10
“We’re a unique business in that we are global,” said Brian Baker, whose team originated $16 billion in loans in 2016, up $2 billion from the year prior. “We’re basically in the business of either lending to banking clients or trading with investor clients. This is what keeps me interested in doing what I’m doing. We have clients on both sides of our business.”
One of Baker’s more exciting projects last year was providing a $765.5 million loan to the Witkoff Group for the Marriott Edition Hotel at 20 Times Square.
“We’re very excited to be involved with that,” Baker said. “The transition of Times Square has been happening for many years now, and [this project] takes it to the next phase.”
Baker and his team also lent $446.4 million to Michael Rosenfeld’s Woodridge Capital for the renovation of the Century Plaza Hotel in Los Angeles and $320 million to Related Group and Oxford Properties Group for 50 Hudson Yards.
These major deals were just the tip of the iceberg for Baker and his team’s productive year.
“We were also involved in some very large financing for Hilton Hotels & Resorts for some of their Hawaiian and San Francisco hotels,” he said. “We put them into a number of securitized transactions over the last few months.”
Baker emphasized that the variety of clients they service is a marked advantage for the firm—and one that hopes to make 2017 as strong as its predecessor.
“We are pretty broad in terms of our product offerings,” Baker said. “The power of the franchise is the ability to leverage the scale of J.P. Morgan and the client franchise. We will do smaller loans all the way up to billion-dollar loans. While we’re institutional in nature, there are plenty of good clients that need $5 million, $10 million, $15 million and $20 million loans as well. We try our best to balance those needs against the resources we have available.”
#18 Chad Tredway and Greg Reimers
Head of Commercial Term Lending East; Real Estate Banking Northeast Market Manager at J.P. Morgan Chase
Last Year’s Rank: 23
Being a New York-based bank, J.P. Morgan Chase had yet another big year of lending in the Big Apple. The bank lent just over $6 billion in debt across the five boroughs last year, according to data from Actovia, up from $4.2 billion from the year prior.
Chad Tredway attributes J.P. Morgan’s success to its “client obsession” and “certainty of execution.” “We remained consistent in our ability to lend to clients when regulatory headwinds hit almost all of our competitors,” he said.
His team focused on providing debt on housing across the city, and some of their deals included a $70 million loan on seven Manhattan apartment buildings, a $55.8 million financing for six multifamily properties across Queens and Brooklyn and a $24.5 million mortgage for 445 East 77th Street on the Upper East Side, city records indicate.
“Since 2013 we have been working to be a stable source of capital because we want people to live in New York City and because the supply and demand characteristics are in our favor,” Tredway said. “We focus on rent-regulated housing for two reasons: No. 1, we believe it’s great for the community. We’re a New York-based bank, and therefore we believe it’s our responsibility to lend on housing that’s affordable in New York City. No. 2, we believe that rent-regulated housing provides a very safe place to lend. The cash flow and volatility on it is lower than free-market assets.”
Greg Reimers’ team was also active and participated in some of the city’s most iconic deals of the year. The bank provided part of the $1.5 billion construction loan for SL Green Realty Corp.’s One Vanderbilt, and it also teamed up with M&T Bank and U.S. Bank on the $250 million loan for the development of Rudin Management and Boston Properties’ Dock 72 in the Brooklyn Navy Yard.
Looking forward, rising interest rates could be a game-changer for borrowers, especially depending on how far and how fast they rise, Reimers said. “Any responsible real estate investor who is looking at a new loan or new acquisition has to look at how much that investment is going to perform in a higher interest-rate environment,” he said. “It affects how much a buyer can pay, and it impacts a lender’s coverage on a loan and their ability to get repaid at maturity.”
Full article appears in the Commercial Observer.
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