Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Thursday, 26 March 2009

Alternative Lender Offers to Finance Debt Buyers

Written by 
Rate this item
(0 votes)

Commercial Real Estate Direct Staff Report

A10 Capital, a Boise, Idaho, provider of financing for commercial real estate, has raised some $100 million that it could use to fund fresh loans or invest in subperforming commercial mortgages.

The company will also provide financing to buyers of distressed debt. Most recently, it started offering its workout expertise, through its Solutions Group, to banks and other owners of distressed and potentially distressed real estate loans.

A10 is the brainchild of Jeffrey Dunn, who formerly was a senior executive at Bank of the West. Two years ago, Dunn and two other founding principals started putting together the infrastructure for the company and raising capital for investments, expecting that eventually real estate would fall from its peak. The other founding principals are Dale Conder, the company's chief operating and risk officer, who previously managed workouts for KeyBanks, and Ken Wilson, executive vice president, who previously was a loan producer for a unit of PNC Bank.

Dunn said that soon after A10 was off the ground and had raised its capital, "we patiently watched the market unfold. Today, we're uniquely positioned. We're not burdened by legacy investments."

The capital it raised came from a combination of an institutional investor partner and a group of high net-worth investors and family offices.

On the property-lending side, A10 will aim to write loans of $2 million to $7 million for properties that might need added capital before they're stabilized. Through its capital-markets bridge program, it would lend on properties that are facing a near-term CMBS maturity. It can also provide cash-out financing.

"We're a good alternative source of financing," said Dunn, who is the company's chief executive. "We can write first mortgages when banks are saying no."

When it comes to investing its capital in loans on the secondary market, A10 will pursue what Dunn categorized as subpeforming mortgages. That is, loans on properties that have seen a decline in cash flow because of the departure of a key tenant or tenants or loans that are still current, but for one reason or another represent a greater risk of default.

"We'll see a continued supply of those assets through the next two to three years," Dunn said. And because its institutional partner could commit additional capital, A10's investment appetite could grow depending on market conditions.

Conder, a 25-year workout veteran, runs the firm's Solutions Group and will offer its services to regional banks and credit units, many of which lack in-house workout expertise. It can provide workout, asset-management, loan-valuation and sales-advisory services.

Comments? E-mail Orest Mandzy or call him at (267) 247-0112, Ext. 211.



weekly-call-to-action

“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Additional Info

  • Syndicate to Realpoint: No
  • Subject: Mortgages/Financing (MOR)
  • Deal Name: Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR12
Read 405 times Last modified on Thursday, 02 April 2009

Data Digest

 

CMBS DELINQUENCY VOLUME

dqdataFP1

 

CMBS SPECIAL SERVICING VOLUME

sschartfp

Top Bookrunners Domestic, Private-Label CMBS - 2016
Investment Bank #Deals Vol$mln MktShr%
JPMorgan Securities 14.94 10,350.16 15.14
Deutsche Bank 14.21 9,926.60 14.52
Wells Fargo Securities 13.36 9,513.96 13.92
Citigroup 10.87 8,061.79 11.80
Goldman Sachs 10.05 7,563.72 11.07

 

MOODY'S/RCA CPPI

 

cppichart FP

 

 

CMBS 2.0 Spreads

AAAspreads

Top CMBS Loan Contributors - 2016
Lender #Loans Vol$mln MktShr%
JPMorgan Chase Bank 133.67 8,670.33 13.34
Goldman Sachs 156.20 7,418.37 11.41
Deutsche Bank 178.17 6,510.75 10.02
Citigroup 184.41 5,512.20 8.48
Morgan Stanley 113.18 4,130.53 6.35

 

 

 

REITCafe

  • Challenging Retail Environment Weights on REITs
    Mixed economic news is weighing on retail markets, pushing REIT performance down in 2015. This week, the National Retail Federation announced that back-to-school spending is expected to be down 9.3% in 2015. This news came on the heels of a report from the Commerce Department stating that retail sales declined 0.3%...
     
  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
warehouse-backstage