October 21-November 3, 2015 —
COLORADO REAL ESTATE JOURNAL
— Page 19
Finance
N
onbank lenders are
becoming increas-
ingly active in pro-
viding significant capital for
the commercial real estate mar-
ket. This group of lenders –
also called hard-money lend-
ers, bridge lenders or private
capital lenders – has under-
gone significant changes since
the end of the Great Recession
of 2008 to 2010.
Today’s new breed of private
money lenders is far different
from the exorbitantly priced
hard-money lenders of old. An
unprecedented amount of capi-
tal is now becoming available
for commercial real estate loans
that do not fit inside the some-
times narrow box that tradi-
tional bank and life insurance
company lenders are willing
to consider. Just a few years
ago, these types of loans were
only offered by a small number
of companies. Now, significant
amounts of capital are being
deployed by hedge funds,
private equity funds, pension
funds and a variety of other
sources into the asset-based
commercial real estate lending
arena.
These nonbank lenders offer
a viable alternative to tradition-
al commercial real estate lend-
ers. They are able to fund large
loans in amounts that used to
be the exclusive province of
banks and life companies. The
new breed of no-bank lend-
ers still bases its underwriting
decisions using a conservative
loan-to-value ratio as opposed
to bank lenders that focus more
on credit-based and cash-flow-
based criteria. Typically they
may limit their loans to 60 to
65 percent of the appraised
value instead of the higher LTV
s t a n d a r d s
required by
banks. How-
ever,
they
provide sim-
plified appli-
cation and
underwriting
s t a n d a r d s ,
and
they
make deci-
sions much
more quickly
than tradi-
tional com-
mercial lend-
ers, funding their loans in a
matter of weeks (or sometimes
even days) instead of the much
longer funding times required
by banks.
Because of their asset-based
focus, these nonbank lenders
are willing to consider non-
recourse loans on commercial
real estate, whereas banks are
typically reluctant to do so.
They also are willing to lend
against raw land and proper-
ties that do not have the debt
service coverage required by
banks and life companies. They
base their loans primarily on
the value of the real estate that
secures the loan and do not
typically have the endless cov-
enants that banks love to put
in their commercial real estate
loans. They make decisions
quickly, close quickly and have
minimal red tape.
Interest rate charges by non-
bank lenders vary depending
on the size of the loan and the
size of the lender. Large insti-
tutional sources such as hedge
funds and private equity funds
can offer rates from 6 to 8 per-
cent. However, they typically
are not willing to fund loans
under a certain minimum size,
often in the multimillion-dollar
range. Local nonbank lend-
ers may charge slightly high-
er rates than the large semi-
institutional national private
capital lenders, but today their
rates are far lower than the
rates that used to be standard
for private money lenders.
If a commercial borrower
requires creativity and flexibil-
ity in finding the right loan,
then it would be worthwhile
for it to look at the new breed of
nonbank lenders that is becom-
ing an increasingly influential
factor in the commercial real
estate capital markets.
s
Robert J. Amter
President, Montegra
Capital Resources
Ltd., Denver
Local nonbank
lenders may
charge slightly
higher rates
than the large
semi-institutional
national private
capital lenders,
but today their
rates are far lower
than the rates
that used to be
standard for
private money
lenders.
A space at 929 Pearl St. to accom-
modate its growing business.
The company provides a digital
marketing platform that integrates
email, display advertising and
social media to help companies
with multiple offices, sales agents
and business channels streamline
their marketing efforts. It serves
approximately 10,000 users in the
U.S. and internationally.
Rezora previously occupied two
suites at 2060 Broadway, common-
ly known as Siena Square.
Ashley Overton
and
Michael
Hastings
of
Flatiron Commer-
cial LLC
represented rezora in the
new lease.
Scott Crabtree
and
Christian Smith
of
The Colorado
Group
represented the landlord.
n
The
American Planning
Association
named Boulder’s
Pearl Street Mall
one of six
Great Public Spaces on its
annual Great Places in America
list.
The list recognizes streets,
neighborhoods and public
spaces in the United States that
demonstrate exceptional char-
acter, quality and planning.
s
Boulder
MMERCIAL REAL ESTATE LENDERS DIRECTORY
Academy Bank
Arbor Commercial Mortgage, LLC
Bank of America Merrill Lynch –
Commercial Real Estate
Bank of Colorado
Bank of the West
Berkadia Commercial
Mortgage, LLC
Bloomfield Capital Partners, LLC
Capital Source
CBRE|Capital Markets
Chase Commercial Term Lending
Colorado Business Bank
Colorado Lending Source
Commerce Bank
Commercial Federal Bank
Essex Financial Group
Fairview Commercial Lending
FirstBank Holding Company
Front Range Bank
Grandbridge Real Estate Capital LLC
Hunt Mortgage Group
JCR Capital
Johnson Capital
JVSC-CBRE Capital Markets
KeyBank N.A., Key Commercial
Mortgage Inc.
Merchants Mortgage and Trust Corp.
Midland States Bank
Montegra Capital Resources,
Private Lender
Mutual of Omaha Bank
NorthMarq Capital, Inc.
RNB Lending Group
TCF Bank
Terrix Financial Corporation
Trans Lending Corporation
U.S. Bank – Commercial Real Estate
U.S. Bank SBA Division
Vectra Bank Colorado, N.A.
Wells Fargo SBA Lending
Wells Fargo N.A. – Commercial
Real Estate Group
