Last year I arranged a $4,000,000 loan for the renovation of a 66-unit loft building in Williamsburg that involved moving numerous tenants around in order to be able to convert upper floor commercial spaces to residential use. I worked closely with the Borrower to help him produce detailed phasing plans for presentation to Lenders, as it was otherwise difficult to get a sense of how the process would work. The initial goal was to get the Lender interested enough to come and see the building in the context of this quickly evolving neighborhood, because then both the property and the business plan could literally sell themselves. Even in a transaction like this where the loan to value ratio is very conservative, it was important to accurately summarize and condense the story, supplying all the relevant data at once in order to overcome Lenders’ basic reluctance to get involved in a complicated deal.

There are times in our hyper-competitive business when we are tempted to put some paperwork in front of a Lender quickly just to make the Borrower think they are getting fast service, or to register the deal first with the Lender before another broker gets there. In the long run, however, that approach will cause more harm than good. When the Lenders stop taking a broker’s submissions seriously, no matter how good the deal is, the broker has lost his credibility.

Generally, the scenario that bodes the best outcome has Borrowers first shopping and carefully selecting an intermediary, and then the Borrower/Broker team working to assemble a complete and professional presentation. This approach will produce the best results for the Borrower, especially with complex transactions.

© 2008. Gregg Winter. All Rights Reserved.
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