Senior Vice President and Head of U.S. Commercial Real Estate Lending at Bank of China
What’s been the biggest market lesson learned during COVID?
Risk managers expect the best; however, they should be prepared for the worst. Having said this, pandemic-specific prep was not in anyone’s toolbox. In normal times, “location, location, location” guides commercial real estate decisions; but, during challenging times, like in a pandemic, great relationships, strong sponsorship and good communication takes precedence. Balance sheet lenders that lean into sponsors who are well-capitalized, support loan collateral, communicate frequently, and work closely with their lender when issues arise, bolster the asset management process.
Are you bullish on New York City?
“The Big Apple” and the “City That Never Sleeps” are well-established monikers for New York for a reason. New York is a global financial, cultural, academic and talent hub, and millions visit the city every year — a record 65 million tourists visited in 2019 alone. It is also an academic mecca for higher education, with one of the largest clusters of colleges and universities in the world, and companies go where talent lives. While COVID-19 disrupted Manhattan’s rhythm, like many other cities around the world, New York is resilient, gritty, and always lands on its feet, coming back better and stronger.
How has your loan portfolio fared through the pandemic?
BOC’s portfolio has performed well, aside from the black swan impact of the pandemic. Our business is focused on institutional sponsors with solid collateral, which allows us to effectively manage any potential surprises.
Which closed deal, post-COVID, are you most proud of and why?
This past summer, BOC closed a $125 million construction loan for an investment grade REIT — a longstanding BOC relationship — which was a build-to-suit housing project for a major private university located in Lower Manhattan. BOC also was a co-lender for a $171 million construction loan for another investment grade REIT. We had financed the 376,000-square-foot, ground-up addition attached to an existing office building, located near Bryant Park, which was pre-leased to an investment grade finance organization.
Any interesting anecdotes about a remote closing experience?
When closing a deal remotely during a pandemic, I have found that patience, persistence and humor are virtuous traits! The hardest piece of managing the process in the virtual world is getting documents signed, notarized, and coordinating messengers for delivery. In the future, I advocate for the return of the Pony Express!
What strengths do traditional lenders and non-traditional lenders bring to the market today?
Both traditional and non-traditional lenders can be accretive. Traditional lenders, specifically commercial banks, typically have a lower cost of capital and keep loans on the balance sheet. A portfolio lender’s go-to strength is having long-term borrower relationships. We have found that borrowers find comfort in speaking with our team, value our accessibility, and appreciate our communication touchpoints as issues arise.
Biggest overlooked market opportunity today?
In previous down cycles, markets with limited liquidity, tepid demand drivers and challenged valuations yielded the highest returns when markets eventually rebounded. Investors with courage, patient capital, and a willingness to do a lot of “heavy lifting” when it came to monetizing out-of-favor assets, could realize outsized gains. However, the election, ongoing pandemic, and uncertain valuation metrics have muddled new investment activity.
New money jumping into the game may seek out: 1) challenged CRE with a public assembly component; 2) distressed note financing (note on note), and 3) recapitalization of asset stacks with preferred equity or mezzanine debt. Lastly, lenders not presently distracted by a legacy loan book can build a debt platform by locking down good sponsors and structuring tight deals with attractive pricing.
“When I’m not doing deals while working from home, you’ll find me…” (please complete this sentence)
“…working out, going to Central Park, walking everywhere, and listening to classical music.”
Favorite TV show you binged during quarantine?
Vintage black-and-white film noir movies — they don’t make movies like this anymore!
Have you eaten inside a restaurant post-COVID, and if so, which one?
I am not quite yet ready for indoor dining at a restaurant.
Any new hobbies taken up during COVID?
1) Perfecting my voice projection in an N95 mask, while ordering my in-store Starbucks drink.
2) Learning how to scrunch my face mask so my glasses don’t steam up.
3) Getting to know the names of all the dogs on my block.
Where is your COVID hideaway? (i.e., Hamptons or New York City or other?)
My home is my castle, and my humble abode has a Manhattan zip code.
Number of haircuts in past six months — family trim or professional?
I’ve only had two haircuts in the past six months. In the past couple of years, my haircuts have always been short visits, as the barber spends more time looking for some hair to cut!
Home office or actual office?
I prefer my home office.
Have you been on a plane post-COVID? If so, where did you go? If not, where will you fly first?
I have not been on a plane during COVID, as I’d rather wait until the dust settles. There is no first mover advantage, and I always prefer to be safe rather than brave!