MBA CREF: The Future of Finance


Downtown San Diego during MBA CREF 2015 (photo: Damian Ghigliotty).
Downtown San Diego during MBA CREF 2015 (photo: Damian Ghigliotty).

At an MBA CREF panel focused on “new directions in commercial real estate finance,” three entrepreneurial lenders gave their thoughts on the latest market trends. Topics included small-balance commercial lending, crowdfunding and the origination of multifamily loans for borrowers with multiple single-family assets.

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Below are some highlights from today’s panel discussion.

The Moderator: Guy Johnson, vice chairman of capital markets at Walker & Dunlop

The Speakers: Craig Barnes, chief production officer at ReadyCap Commercial; Jilliene Helman, founder and CEO of Realty Mogul; Beth O’Brien, president of Colony American Finance

2:05 pm

Mr. Barnes on the small-balance loan space: “Our mission is to stay small. Small’s not going away. We try to work where other lenders are not. In between the banks like Chase and some of the CMBS lenders that are doing small loans, there is a lot of space where you can work.”

2:15 pm

Ms. Helman on the crowdfunding market: “We’re using the term ‘online originations’ a lot more now. These [investors] are sizable institutions, including big banks and hedge funds. We act as an origination channel for those institutions. Our vision is to use technology to be one of the fastest lenders in the country. We just launched our commercial lending group this week and are planning to put out $250 million in capital this year. We expect that to grow to billions in the next few years.”

2:20 pm

Mr. Johnson: “Are you seeing life companies taking part in online originations?”

Ms. Helman: “Not yet, but we will be. Life companies and big private equity firms like Blackstone, they are all chasing paper. We provide another channel for them to do so.”

2:30 pm

Ms. O’Brien on multifamily loans for borrowers with multiple single-family assets: “The size of this market has the potential to be larger than the multifamily market. The demand and the need for rental loans at the mom-and-pop level are always there. Some of the community banks used to do this, but with some of the provisions of Dodd-Frank, they are having a tough time figuring out of if these are residential or multifamily deals. That leaves a lot of opportunity for us.”

2:35 pm

Audience member: “Is there a greater concern over default?”

Ms. O’Brien: “There are challenges in that regard. Managing ten single-family homes is a lot more difficult than managing one multifamily property.”

2:40 pm

Audience member: “Are you seeing any opportunities in build-to-rent?”

Ms. O’Brien: “We are. There are more developers doing build-to-rent single-family homes now.”

2:45 pm

Audience member: “Do commercial brokers need to have residential licenses to do these kinds of deals?”

Ms. O’Brien: “No. This is considered a commercial mortgage loan in almost ever state.”

Mr. Johnson: “I suggest you check with your local regulation on broker licensing first.”