CREFC 2018: Columbia Pacific’s Billy Meyer Talks Competition and Customer Service
Seattle, Wash.-based Columbia Pacific Advisors has had a busy start to the year. It recently closed a $55 million refi/acquisition/ bridge-to-sale financing package in South Boston and a $35 million loan on a stabilized office building in East Hollywood. So far the debt fund has deployed $500 million across 40 loans, and it’s hungry for more. Commercial Observer caught up with Billy Meyer, a managing director at the firm, at CREFC’s annual conference in Miami to learn more about his personal conference agenda.
Commercial Observer: What do you think the general sentiment is here at the CREFC conference?
Billy Meyer: I think the majority of folks in the lending space believe there’s still plenty of deals to be had and opportunities exist for each and every lender, whatever their space is. The volumes for each individual production might be down, simply due to new competition. There’s a lot of money out there and new competitors are trying to find yield in different capacities. So, people are varying their strategies and maybe opening up new funds in order to target different markets. From what I see and from what my peers are saying, there are opportunities and heads are up chasing them down.
What is your competitive edge as a bridge lender, would you say?
In our specific space, communication is a big part of it. You’re partnering with a borrower and that means communicating effectively up front and then throughout the documentation process. The moment we’re first introduced to a new opportunity through to closing on that transaction might take three weeks or five weeks depending on how effective our communication is. We’re a short term bridge lender and we’re able to move very fast, so we need to communicate effectively if we’re going to talk through everything effectively in a short period of time. What separates us is, too, is that our money remains on our balance sheet the entire term of the loan and its fully discretionary based on what we want to do internally—we don’t have to go outside our walls to get approvals from anyone else and we don’t have multiple levels of credit committees. Also, everyone on our team can talk through a deal’s intimate details with the broker or the direct borrower, understand the execution strategy of what a borrower is trying to do and understand what makes sense and what doesn’t. We pride ourselves with a high level of customer service and we understand that quick responses are what brokers and borrowers are looking for.
What’s a typical deal for Columbia Pacific Advisors?
We’re a lender in every region in the country and on all property types. We are most effective with Borrowers who need money fast, need a high level of confidence in closing, need the money for a short period of time or have a situation that is not quite bankable yet. We don’t do new construction loans and we don’t do suburban land loans. But we’re very good at senior housing, affordable housing, multifamily, retail, office and self storage. Any type of cash-flowing, commercial real estate is where we excel and can close really fast. Our average loan is about $16 million, but we’re working hard towards increasing it to be $20 to $25 million. We’re hungry to get out there but at the same time we are all investors in the fund so we really care about making good decisions and getting our money back.
So you have skin in the game.
Yes. I have a piece of my own net worth in the fund as well as some of my parents’ retirement money. So with every transaction I think about whether I’m comfortable investing in this deal—I don’t want to lose on a deal and have my parents move in with my wife and kids [laughs]. the fund is entirely made up of private investors. There’s no institutional capital in the fund and nobody dictating what we can or can’t do. We do what we feel is right from a business sense.
What are some of your recent deals?
We did a roughly a $55 million loan in South Boston. It was a debt consolidation of a couple of different loans plus additional funds to acquire an adjacent property. The neighborhood was up-zoned recently so the borrower got a golden ticket. His property per square foot is now worth considerably more. We gave him a refi loan, an acquisition loan and a bridge-to-sale loan at 60 percent loan to value. We also did a loan in East Hollywood that was roughly $35 million. It was on two adjacent parcels and one stabilized office building that just experienced a major tenant leaving—so it was around 60 percent occupied. The borrower had two loans and one loan matured, so again it was a debt consolidation and bridge-through-stabilization. We refinanced two loans and included proceeds for tenant improvements and leasing commissions.
What was your main purpose in attending the conference?
We’re focused on lead generation. We look to meet with brokers and also other private lenders who do almost exactly what we do but not quite, so lenders who aren’t comfortable lending on affordable housing or senior housing whereas we’re fluent in that space. We’re in the customer service business ultimately and brokers call us and the deal is not a good fit for us, we’ll refer them to who we think could be a good fit. It’s a small world in our lending space and we’re willing to share opportunities within the lending community. I believe there are plenty of opportunities around and greed is pretty low right now, it’s actually a really friendly space.