Page 24 —
COLORADO REAL ESTATE JOURNAL
— June 15-July 5, 2016
Finance
by John Rebchook
Lakewood-based FirstBank
made a near record $722.6 mil-
lion in business loans in the first
quarter.
The loans by FirstBank, one
of the nation’s largest privately
held banks and the second larg-
est in Colorado, included con-
struction, land development and
real estate.
Indeed, most of the loans it
made involved real estate.
FirstBank also provided financ-
ing for equipment and for cli-
ents needing U.S. Small Business
Administration loans in the first
quarter.
But business lending only
accounted for about $51 million
of the total.
“The balance was for commer-
cial real estate, with roughly 50
percent for construction lending
and 50 percent for other types
of
loans,”
i n c l u d i n g
bridge loans
and refinanc-
es, according
to Ron Tilton,
president of
F i r s t B a n k -
Denver.
While First-
Bank also has
operations in
California and Arizona, Tilton
estimated 80 percent of the loans
were in Colorado.
It was an active quarter for
FirstBank.
“It was right in line with what
we did in the first quarter of 2015,
which was our biggest first quar-
ter,” in terms of lending, Tilton said.
“We are on the same pace as
in 2015.”
The two main asset classes
FirstBank made loans on were
multifamily and office. Loans
included the well-received
MOTO apartment building and
a 240-unit housing community
planned in Silverthorne.
“We also do some mixed-use,”
Tilton said. “A good example
would be a hotel with retail on
the ground floor.”
FirstBank also made retail
loans.
“We would like to do more
industrial, but we just haven’t
had that many opportunities,”
Tilton said.
FirstBank continues to make
a lot of multifamily loans, but
at the same time, it is worried
themarket is becoming overbuilt,
especially for high-end commu-
nities in and near downtown.
“My answer may sound con-
fusing, as we continue to make
multifamily loans, but we are
concerned about all of the inven-
tory coming on line,” he said.
He follows Cary Bruteig’s
analysis of the apartment market
very closely, for example. Bru-
teig, the owner of Apartment
Appraisers & Consultants, pub-
lishes Apartment Insights, a mul-
tifamily database that includes
sales, occupancy levels and rental
rates.
Because of fears of overbuild-
ing, FirstBank has tightened its
lending standards.
It’s not alone in doing so.
“My sense is that most lend-
ers are tightening their lending
standards when it comes to mul-
tifamily lending,” Tilton said.
That means that FirstBank
requires more equity in deals.
“It varies with the loan size,
but I would say that with a small
deal, we will require a minimum
of 25 percent equity and with the
larger deals we want 40 percent
to 45 percent down,” Tilton said.
As far as a “sweet spot” for
lending, “we are a little bifur-
cated,” Tilton said. “We will do
a lot of $15 million to $20 million
deals and then we might make
a very large new construction
deal, like you see in Five Points
or downtown or along light-rail
stops,” he said.
They also will provide financ-
ing for small investment groups
or one or two families that are
buying apartment communities
built in the 1970s and 1980s.
“We will do a lot of $1 million
to $2 million loans,” for those
types of buyers.
“Those deals might be for two
local families or real estate part-
ners looking to buy a small prop-
erty in Capitol Hill, for example,”
he said.
One reason FirstBank hasn’t
stopped making apartment loans
is because of the growth of Den-
ver’s increasingly diversified
economy.
“There is a lot of discussion
in our industry about overbuild-
ing in downtown or along light
rail and in TOD (transit-oriented
development) projects, but you
can argue both sides,” Tilton said.
“These are the places where the
demand is occurring,” he said.
“So we are not shying away
from lending in downtown or
TOD or RiverNorth, just because
there are a lot of projects moving
forward,” he said.
Also, FirstBank puts a lot of
stock in the track record of the
developers it deals with.
“It’s interesting, because in the
vast majority of the cases, we
have been doing business with
the people for a long time,” Tilton
said.
“But, in their next deal, they
might be bringing on a new
investment group or investment
partners, whom we have never
met before. Denver is a big city
with a lot going on, but it also is
a tight-knit community and a lot
of people want to be here,” Tilton
said.
Other News
n
Leon McBroom
and
Eric
Tupler
of the
Holliday Fenoglio
Fowler
team in Denver, recently
arranged a $14.46million loan for
an industrial property in RiNo,
which will be converted into
“creative” office space.
McBroom, an associate direc-
tor at HFF, and Tupler, a senior
managing director, arranged
the bridge and construction
financing for 2323 Delgany, an
83,133-square-foot, 100 percent-
leased industrial warehouse.
They worked exclusively on
behalf of the borrower, a joint
venture between Denver-based
EverWest Real Estate Partners
and
WHI Real Estate Partners
LP
of Chicago.
McBroom and Tupler secured
the fixed-to-floating-rate loan
through
First National Denver.
First National Denver is a divi-
sion of the First National Bank of
Santa Fe.
The initial fixed-rate loan fund-
FirstBank made a loan on the MOTO apartment community at 820
Sherman St. in Denver. MOTO stands for Middle of Town.
Ron Tilton
