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Thursday, 26 March 2009

Alternative Lender Offers to Finance Debt Buyers

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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.


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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Mortgages/Financing (MOR)
  • Deal Name: Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR12
Read 984 times Last modified on Thursday, 02 April 2009

Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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