Matt Galligan On CIT Group’s New Real Estate Finance Division
By Carl Gaines March 27, 2012 5:58 pm
reprintsDuring the marketing of the loans, CIT Group and Mr. Galligan started talking and an agreement was reached to do a lift-out of his entire team. Paul McDonnell, head of the Property Finance Group at Bank of Ireland, told The Mortgage Observer that Mr. Galligan and his team had worked professionally throughout the closure of the business. He also underscored the success the portfolio had achieved.
“We had a very good experience with Matt—he did a fantastic job for us,” Mr. McDonnell said. “I think that the best way to confirm that was the success that we had with our book over there. And when we had to sell it—and we had to sell it in terms of broader issues—we achieved a very strong price for it. A lot of that I would put down to Matt’s management of the business.”
An announcement went out over the wires at the beginning of November 2011. CIT Group Inc. president Nelson Chai heralded the arrival of Mr. Galligan and his team as indicative of CIT’s focus on opportunities for growth. “The deep relationships and industry expertise of our team will enable us to capitalize on market conditions while pursuing a conservative approach in middle market commercial real estate financing,” Mr. Chai said in a prepared statement at the time. He added the launch highlighted a “focus on growth opportunities and efforts to source and build assets at CIT Bank.”
The road to CIT Real Estate Finance—his fifth start-up, no less—has taken Mr. Galligan through a long list of familiar bank names. He grew up in Wallingford, Conn. and attended college in Worcester, Mass. at the College of the Holy Cross. He and his wife, whom he met at Chase, have two sons and live on 41st Street, an easy walk to his new office.
Personal projects include golf, travel and reading (on a recent trip to Aguadilla on Puerto Rico’s western coast, he worked his way through His Way: The Unauthorized Biography of Frank Sinatra, by Kitty Kelley). He meditates twice a day.
Professionally, he got his start in the Chase global credit training program. While finishing up the program, he met and started doing some analytical work for William McCahill, who retired last October from Capital One, where he was an executive vice president. The two became mentor and mentee.
Reached at his home, Mr. McCahill told The Mortgage Observer that he saw at the time “a fantastic young guy—very bright and energetic.” After ten years at Chase, where he left as a vice president and team leader in the Real Estate Department, Mr. Galligan went to the Bank of Boston. There, he created and managed its real estate distribution process—structuring, arranging and placing multi-bank syndications.
Recruited to run its syndications desk, he rejoined Mr. McCahill at Fleet in 1996.
“He became what I would label the high priest of the syndications world,” Mr. McCahill said of his friend. “He was by far I think the most respected banker in putting major syndicated deals together. That reputation really put Fleet into the big leagues, so we were able to do $200 million and $300 million deals because we knew Matt and his group could sell them down very quickly.”
When asked about the title later, in CIT Group’s offices, Mr. Galligan shunned the credit. “He’s being very modest,” he explained. “He’s really who put Fleet into the big leagues here in the city.”
But structuring syndicated loans was definitely an area of focus, and one that provided him with a plethora of contacts. “I syndicated debt for 15 years, and that’s how I established a lot of my contacts here in New York because I was here for 10 and then I went to Boston for 20, but I was constantly on the phone with bankers in New York,” he explained. “And I got into that business when it was developing so I was one of the early guys and I’ve gotten to know an awful lot of people as a result of it.”
At CIT Group’s midtown offices, homage is paid to one of the bank’s primary business areas. The bank is a leading aircraft lessor and dozens of aircraft models line cabinets and walls on the route back to the area where Mr. Galligan and his team sit. By industry, commercial and regional airlines comprise the largest chunk of the assets in its portfolio, at 25.9 percent. And as December 31, 2011, transportation finance was a $13.3 billion portion of the bank’s business. Student lending—originations ceased by April 2008—still made up 18.5 percent of its assets at the time, followed by manufacturing at 12.9 percent.
Its total assets, as of December 31, 2011, were $45.3 billion and total loans decreased from $21.9 billion to $19.9 billion over the fourth quarter of 2011, mainly due to the termination of student loan originations and the transfer of $2.2 billion of student loans to held-for-sale status.
Mr. Davis, at Guggenheim Partners, said that a part of this new chapter for CIT Group “is a return of CIT to being a more active lender after having reduced its loan and lease portfolio by about 50 percent from where it was pre-crisis.”
So with its focus on top-tier sponsors and developers in major cities, what kind of loans might come out of CIT Real Estate Finance?
“Well, first of all, what we’re looking for is not necessarily the largest developer,” Galligan said when asked that question. “We’re looking for one that’s kind of best-in-class. We typically would like developers that are building very close to the urban core because we think that there’s less risk being associated with the marketplace because there are much higher barriers to entry.”
