Finance  ·  Players

5 Questions With Actovia CEO Jonathan Ingber 

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After working in the brokerage industry for much of the 2000s, Jonathan Ingber decided a new tool was needed to arm commercial real estate players with the most up-to-date lending data.

So Ingber launched CRE intelligence and data firm Actovia in 2009 on the heels of the Global Financial Crisis with an initial focus on the New York City region. The platform has since expanded to track commercial mortgage-backed securities (CMBS) on a national level.

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Ingber spoke with Commercial Observer in late August about his impetus for founding Actovia, what he is seeing with New York City lending trends in 2024, and his outlook for CRE loan volume in the year ahead. 

The interview has been edited for length and clarity. 

Commercial Observer: What was the impetus for starting to track this data when you launched Actovia in 2009

Jonathan Ingber: Back in the day, people were getting information from what they used to call the standard books, which were actual books that had ownership information and people would buy them at least annually, but there was nothing really in computer form back then. 

I had been working with brokers for many, many years and understood their challenges of getting information, and what information is key and how to get that information and how it should be presented. So that helped me build this. I was working at a brokerage until 2008 and the market really tanked. It was an implosion of commercial real estate investments, and the industry really crashed. I was let go of that company, and I thought at the time that there were very few tools out there that have transparent information for people to be able to do their due diligence, to be able to generate leads and to be able to find more deals. 

What stands out to you most about the 2024 data so far with New York City lending trends?

A lot of the balance sheet lenders almost came to the skids and stopped lending about two years ago, and now some of them have started back a little bit. What we have seen in 2024 is a lot of the nontraditional bridge lenders doing more traditional loans. We’re always looking at the top 25 lenders and we’re seeing more new types of lenders coming in. Some of the more traditional ones have even less loans than them. 

Even though rates are a lot higher we do see deals getting done. If you compare the first six months of 2023 versus the first six months of 2024, we’re actually looking at close to 90 percent, which means there were 2,269 loans versus 2,149, and 4,412 mortgages versus 3,888 — so, basically, it’s like a 10 percent drop. People thought that loans would be falling off and they’re not falling off. And, when you look at the average deal amounts for loans in 2023, it was around $9.5 million, with 2024 higher at over $10 million. So it’s not a huge difference, but definitely a difference and I think that that reflects on the realities in the market. 

What struck me in your June report was that the number of New York City office loans increased that month by 41.38 percent. Is that perhaps a sign of a turnaround for the sector?

In New York City we’re actually seeing a modest rise in office volume. Sometimes you really can’t tell from one month, but there definitely is a modest rise from the real low that we had in late 2023, and I think that may have to do with the possibility of people being creative and looking at the possibility of multifamily conversions. I think the city has become more receptive, especially since there’s a huge demand for multifamily. So that may be a reason why people are willing to take a risk. Office attendance has risen a lot, but it hasn’t come back to pre-COVID, and, obviously, that reflects in the values, the financing dollars, and the rates being where they are.

There was a lot of doom and gloom about the defaults in the office sector. I’m not seeing the defaults that were predicted, but when we hear about it we definitely hear about it, so it’s a little bit too early to tell how that will ultimately play out. But I’m an optimist. So, as far as I’m concerned, I think that ultimately New York is really resilient and they can get through a lot of the things that maybe perhaps other areas in the country have a more difficult time getting through.

At the end of the day, it’s definitely a difficult time for borrowers, and I definitely see in the brokerage community how they have to be really creative to get deals done to sell buildings or refinance them. 

Turning to CMBS, which you track on a national level. What’s the starkest trend you’ve noticed with this market in 2024?

Surprisingly enough, I really haven’t seen a big drop in CMBS activity. There were 24 deals in 2022, 27 in 2023, and so far 15 for 2024. So we’ll actually probably finish higher than 2023. So there really hasn’t been a huge drop in the amount of pools. 

When you look at the average size of the pools, it was $788 million in 2022, $665 million in 2023 and so far in 2024 it’s $772 million. The defaults are mostly happening in office and retail, and less in multifamily, industrial and hospitality. What I’m seeing from a lot of the rating agencies is that the default rate is less than 10 percent. Obviously, rates are much higher and we’ve been seeing numbers in CMBS transactions that we haven’t seen probably since 2002 and 2003 in the sevens and even in the eights. 

New York City is a lot lower, but out there in the country I’m seeing even low eights, believe it or not. There’s a big, stark difference between CMBS and Freddie, Fannie and HUD, where there’s been a huge drop in volume and concentration. Obviously, those are specifically concentrated in multifamily, and specifically in the low-balance loan area there’s been a huge drop, and it is something that is concerning. 

What are your predictions for the rest of 2024  as far as what we can expect with issuance, either in New York City or nationally

What we’re seeing in general is stable interest in activity. It’s definitely hard to get deals done. It’s not as bad as people think, but to get a deal done today you have to be more creative in how you construct a deal. The borrowers have to be more accepting of the realities, and the lenders have to be more realistic, and the brokers have to also see the reality and be able to help get the deal to the finish line. Many of the big-name banks are not lending as much, and we’re seeing a lot from some of the bridge lenders. There are some big-name banks that are showing volume dropping 25 percent or more.

I think, in general, New York City will recover. It may take some time, but I think a lot of that correction is already baked in, and I think as borrowers get more comfortable with the lending environment they’ll learn to adapt. You’re going to have a situation where some borrowers will fail, but, by and large, I would say there’ll be somewhere around a 10 percent drop in volume, and it’s possible that it’ll end up in the black if things improve depending on where rates go — and it looks to us like rates will start leveling off. 

Andrew Coen can be reached at acoen@commercialobserver.com.