Chris Allman, CIM Group
Chris Allman
Principal in capital markets at CIM Group
When COVID-19 started to grip the U.S., CIM Group took action. With $30 billion of assets under management, the investment firm took a proactive approach and started having conversations with its lenders.
“CIM runs a very, very low-leveraged balance sheet,” Chris Allman said. “We’re borrowing between $5 and $7 billion a year in the markets from the same people, so we have very deep relationships. So, we started to have conversations, and those conversations paid massive dividends. We haven’t had any balance sheet issues or lender issues, which has really allowed us to play offense.”
Since COVID began, CIM has acquired several assets. “We bought a very, very large multifamily building right after COVID started at a pretty significant discount, but multifamily prices have held pretty firm. We felt like that was a great transaction for us,” Allman said.
In addition to making some multifamily purchases, CIM has lucked out on its existing data center investments, with COVID only accelerating the need for these assets.
But the key opportunities right now are on the debt side, Allman said: “We’ve really seen the transaction activities in our credit funds. The volume has gone up dramatically, and we’re getting paid 40 to 50 percent more in spread and offering five percent less leverage. Our credit fund is extremely well-positioned relative to the market because of the way we financed ourselves. We didn’t use fund-level leverage, and we had well over $1 billion dollars in capital to invest [at the start of COVID]. So, we’re aggressively making loans.”
Indeed, CIM is signing up new deals weekly. “Our debt funds are extremely active and benefit from our direct origination capabilities and our partnerships,” Allman said. “Banks see CIM as a massive credit enhancement, because we are a fully, vertically integrated real estate platform; and that, if there’s ever an issue with an asset, we can step in, provide guidance and, if necessary, take it over. But we’ve never done that, and have no intention of ever doing that.”
Allman said distressed market activity is also picking up as the year draws to a close, and CIM has received several calls from market participants looking for capital.
“Distress is a really interesting thing. I’ve been doing this 25 years now and it’s my fourth cycle,” he said. “But what’s happening in the distress space this time is the conversations are very, very under the radar.”
Allman said the first few months of COVID were some of the busiest of his life from a work perspective. But, despite all the uncertainty that came with 2020, it also brought cause for celebration in the form of his wedding this year. Congratulations, Chris!—C.C.
