Chris Niederpruem

Describe the past 12 months in one word, then expand on your choice.

Grind. The current economic and interest rate backdrop is driving a challenging environment in commercial real estate. The Federal Reserve’s higher-for-longer approach is having its intended effect of slowing economic activity in hopes of slowing the pace of inflation. That is impacting commercial real estate owners and developers as they manage their portfolios and consider growth opportunities. The impacts are industry-wide and show no signs of imminent change. As a result, we’ve had to shift our focus and work harder than ever to make up for historically low levels of deal activity.

Tell us about a recently closed deal you’re proud of, and its biggest challenges/high points.

First Citizens served as lead arranger on construction financing for Quinlan Development’s multifamily project in Gowanus, Brooklyn. The project is in a high-growth area of the city and qualified for the Affordable New York program to deliver a significant number of affordable-rate units to the community. It was a great opportunity to build on our existing relationship with Quinlan, who we’d worked with recently on another multifamily development in the Clinton Hill neighborhood of Brooklyn.

What are/aren’t you lending on today, and what’s changed in your loan terms?

Given today’s landscape, we are not actively making loans on office properties, and our new loan origination is muted. However, we remain focused on multifamily and industrial properties in markets where demand remains strong. Our advance rates have been adjusted to reflect the new interest rate environment.

Has certain lenders’ retrenchment been beneficial to your pipeline? Discuss. 

Less competition often equates to more opportunity. The reality is a bit different now as deal activity is well below historic levels. But for lenders that remain active, times like these provide opportunity to support existing clients and win business from key new clients.

What’s your approach when it comes to loan extension requests? 

Every situation is unique and requires a tailored solution. We don’t have a one-size-fits-all approach; rather, we work with each client on a case-by-case basis. 

Will rate stability calm market volatility, or is that wishful thinking? 

Interest rates are a key factor in commercial real estate lending (and investing); however, they are not the only thing driving today’s market dynamics. Underlying fundamentals driving demand along with inflation are also at play. Clarity on rates could provide some stability.

What scares the bejesus out of you in today’s market? 

Interest rates rose at a precipitous rate and appear to be poised to remain higher for longer. Yet rates are not high by historic levels. I worry about decisions being made with the assumption that rates are coming back down to the levels seen after the GFC, as that is optimistic.

Lightning Round:

Multifamily or Industrial?

Multifamily.

Taylor Swift or Beyoncé?

Taylor Swift.

What would be the title of your Lifetime biopic?

“Banking on Success.”

‘Ride or dies’ only (relationship borrowers) or taking on new borrowers? 

Both. Supporting relationships but looking to build new as well.

Vacay time: Mountains or beach?

Beach.

Complete this sentence: If I weren’t a lender I’d be a…

Writer.