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

Tuesday, 13 November 2012

Sabal Financial Launches Bridge-Lending Program

Written by 
Rate this item
(0 votes)

Commercial Real Estate Direct Staff Report

Sabal Financial, an affiliate of Oaktree Capital Management that has been an active buyer of distressed mortgages, is stepping into the bridge-lending arena.

The Newport Beach, Calif., company will pursue the middle market. That is, loans of between $5 million and $20 million. Its loans will be relatively short-term, with terms of two to three years, with possible extensions, against properties that are best described as being value-add opportunities. Loans will typically require a 1 percentage point origination fee and similar exit fee and will carry floating rates, subject to Libor floors.

To get the program in gear, the company has hired James M. Martin as director of its commercial real estate bridge-lending group. He is a 25-year veteran of the commercial real estate finance arena and most recently ran a brokerage company, Martin Real Estate Group, in California that focused on arranging financing and investment-sales transactions. He previously was with Picerne Group and Orix USA.

Initially, Sabal will focus on writing loans of $5 million to $10 million each against properties in four Western states: Arizona, California, Oregon and Washington. It is in the process of building an origination team and looks to expand its presence nationwide.

The $5 million-$10 million space is one in which relatively few lenders compete. It will provide capital to fund the acquisition of underperforming properties that can be turned around, recapitalizations and discounted pay-offs of loans.

Its aim is to write loans that amount to about 75 percent of a property's stabilized value. That means they can amount to as much as 90 percent of a property's cost, before it's stabilized.

"Every loan we write is customized," Martin said, explaining that most will have some sort of future funding mechanism, which takes advantage of the sophisticated servicing systems that Sabal developed specifically for its workout practice. "We listen to the sponsor's business plan and develop a loan structure" that would facilitate the plan's execution, he said.

The lending business "is a natural extension of our core business" of buying and working out distressed loans, Martin said.

The company, previously known as Milestone Asset Resolution, has some $4 billion of assets under management. It's been among the biggest buyers of distressed assets through FDIC's structured-offerings program, in which the agency sells stakes in large portfolios of failed-bank assets.

It made its investments in partnership with Oaktree, which subsequently acquired a non-controlling stake in the company. Sabal was founded three years ago by R. Patterson "Pat" Jackson, the former founder and chief executive of IndyMac Commercial Lending Corp.

In underwriting its loans, Sabal will focus on property location, the turnaround plan and on whether a take-out loan could be had when the property is stabilized.

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


“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)
  • Private: No
Read 1835 times

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





  • 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