David Perlman

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

Transition. Transition from a low-rate environment with short-term real estate holds to a historically higher-rate environment where investors need to hold real estate investments for 10 years or more to see enough capital growth to justify their investment.

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

More multifamily and industrial since we lowered our spreads and have the benefit of SOFR to meet our returns. We love data centers and have been doing many ramp-up financings, also known as construction takeout financings. Limited fixed-rate, since it’s not as profitable. Shorter terms, two- or three-year loans with one-year extension options 2,1,1 over 3,1,1. Lower leverage in the 60 percent to 65 percent range and utilizing the sub-debt market to fill the capital gap. Less construction lending, at the moment, because pricing for construction financing is similar to non-construction financing in some cases. 

Name two markets you’re gravitating toward today, and tell us why. 

New York, since it’s still the heart of American capitalism that attracts tremendous institutional and foreign capital. Patience is key but investing in New York should yield lower basis investment opportunities. Raleigh-Durham Research Triangle Park, because it will benefit from not only the depth of its first-class education facilities and being the state capital, but also from its relatively lower cost of living and the out-migration from Florida, where residents are still experiencing rising costs. 

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

Obviously, less competition has resulted in more brokers trying to build new lender relationships, including with us. More importantly, sponsors have sought us out through wonderful Commercial Observer articles on our closings, showing that we are still open for business. Several lenders have decreased or exited the lending market in 2023, allowing for us to pursue better sponsor and credit loans as a result of less competition.

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

Reasonably work with the sponsor if they are short on the extension tests. We re-underwrite the transaction for today’s market and re-appraise the property to get third-party opinion of value. Once these steps are completed, the loan may need to be restructured to extend, which can include a re-commitment to the asset by the sponsor with fresh equity. Since we are regulated by the SEC, we have the fiduciary duty to maintain reasonable fund leverage and create a path forward where our investors are fully repaid.

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

It’s one part of the market formula. It would calm market volatility if our Congress operated civilly and if the geopolitical issues were muted.

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

Insurance premiums on Florida properties.

If you could make like Scott Baluka and quantum leap back to November 2022, what would you tell yourself?

Artificial intelligence is the new frontier in the tech space that has the potential to affect all industries and how we utilize tech in our day-to-day lives. And, also, that we did not have a recession.

Lightning Round:

Multifamily or Industrial?

Industrial because of the longer-term leases.

Taylor Swift or Beyoncé?

Taylor Swift, only because I have Travis Kelce on my fantasy football team.

What would be the title of your Lifetime biopic?

Untitled.

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

I swing both ways on this question.

Vacay time: Mountains or beach?

Italy, California, Cape Town, places that offer both at the same time.

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

I’d be a borrower!