6A — November 8 - 21, 2019 — Lender’s Directory — M id A tlantic
Real Estate Journal
www.marej.com
Lender’s Directory
By Brenner Green, Real Property Capital, Inc. “It’s a New World”
E
arlier this week, the above words were spo- ken to me by a cli-
ket. This occurred after nine months of effort by three members of our team, my- self included, to recreate the books and records of the project into a legible format, shop the deal to over 60 lend- ers and then toil away on the due diligence for six months which, incidentally, hap- pened to be like pulling teeth at times with the client’s organization. The lender had done their part by figur- ing out how to accommodate an unusual structure that included a second mortgage from a government agency
that had to stay in place be- hind their loan. In addition to this an- nouncement, my client in- formed me that he didn’t feel that I was providing adequate service in repre- senting his position vis a vis the lender. I was ac- cused of “just trying to get the deal closed” rather than represent his best interest. I responded to my client that I had no idea that he wasn’t happy with the terms; he had negotiated and accepted the term sheet on the table with everyone acting in good faith
and had never expressed hesitation to move ahead, and that I consider myself a good broker, and that’s what good brokers do, they find ways to get to closed. I also noted that he had hired me to provide guidance as to what the market would bear, and he had decided that we were no longer at “market” deal terms without consulting with me as to what I thought of the prospects of getting a better deal. The reason I bring this up is not at all to whine about a client I find to be somewhat
difficult. Closing over 500 individual transactions has shown me the old adage of “you can’t make everybody happy all of the time” is true. Despite busting your hump and doing your best, it may not be good enough and you have to be honest with your- self and find a way to be ok with the outcome regardless of who’s right or wrong in order to keep moving ahead. The point here is that we may be at an inflection in the market with further tilt to greed away from fear. It feels like it is getting more difficult to get a deal done in an economical way and to everyone’s satisfaction. The high volume of transac- tions occurring is pushing up closing costs, particularly legal expense on both sides. Many lenders are running leaner and files are often not reviewed until shortly before closing which can cause ad- ditional questions to arise when we should be preparing for closing. All of this is highly aggra- vating to both borrowers and brokers alike. However, the world hasn’t changed. There is no better mousetrap, and if one wants to mitigate risk by borrowing non-recourse in cash-out and zero cash flow bridge situations, capital markets are often the only viable option. In addition, the cost of capital is as cheap as it’s ever been. The psycho- logical effect of a flat yield curve can make one feel like they are getting ripped off by borrowing short, without looking at the cost of capital relative to historical norms. Capital, in addition to being super cheap, is also about as available as it gets. Closing can be annoying and more expensive than it sometimes should. When that happens, we help cover it out of our end, because it’s the right thing to do when you work collaboratively with the cli- ent as we do. So, let’s not lose sight of the goal, which is to get to closing instead of look- ing for the next best thing. R. BrennerGreen is a 20- year veteran in commer- cial real estate finance and president of Real Property Capital, Inc., a full-service commercial mortgage banking firm based in the Philadelphia suburbs.
ent who six months af- ter signing a loan appli- cation and putting up a considerable deposit with the lender, decided he
Brenner Green
wanted to renegotiate the original terms because he felt that in his view the deal terms were no longer relevant to the current mar-
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Real Property Capital is a Philadelphia based full service commercial mortgage banking firm with a regional focus and national capabilities. Our business model emphasizes client satisfaction through a high-touch, analytical approach that distinguishes us from the competition. Learn more about our distinct approach and proven track record of success at www.realpropertycapital.com. FOR MORE INFORMATION: R. Brenner Green, President 303 Harry Street • Conshohocken, PA 19428 • 610-456-9644 • bgreen@realpropertycapital.com
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