NEWPORT BEACH, CA—The commercial real estate finance market is watching to see whether the Trump administration will advocate changes to Dodd-Frank and how those changes could impact the securitization and banking side of the market, Buchanan Street Partners VP Matt Doerr tells GlobeSt.com. The firm recently provided a $16-million loan to refinance 21845 Magnolia St., a 29‑acre industrial facility in Huntington Beach, CA, recently purchased by subsidiaries of Shopoff Realty Investments. The loan represents the company's ongoing strategy to provide reliable bridge financing for value-add real estate.
Buchanan Street also recently provided an $18-million loan to a major Los Angeles-based development firm for the acquisition of an existing shopping center in Granada Hills, CA. The loan was funded through Buchanan Street's proprietary bridge lending platform and provides additional funds for interest, pre-development expenses as well as “good news” funds if entitlements are secured. The borrower recognized the attractive in-place zoning, which may permit high-density commercial and multifamily use. The “by‑right” zoning designation greatly enhances the site's redevelopment appeal.
Lastly, Buchanan Street continues to expand by recently adding Chris Cervisi as assistant VP to its debt-investments team to meet its growing business and market demand. Cervisi joined the team last month with more than eight years of experience structuring equity and debt and is responsible for sourcing, structuring and underwriting real estate debt investments. In his previous role, he was focused on office and retail acquisitions and asset management, including underwriting, market research, business-plan formulation, reporting of fund investments and dispositions.
We spoke with Doerr about these two transactions and the hiring of Cervisi, how they all relate to the company's strategy going into 2017 and where he sees the private-lending market heading.
GlobeSt.com: How are the refinancing of the Huntington Beach industrial/land property, the acquisition loan for a San Fernando Valley shopping center to be redeveloped and the addition of Chris Cervisi related to your company strategy?
Doerr: These most-recently funded loans and the hiring of Chris are tangible indications of not only our platform and personnel growth, but the positive reception of the Buchanan Street brand within the bridge-lending business. These loans specifically affirm our Western US regional focus and adaptive structuring capabilities in customizing varied loan solutions. Chris's diverse background on both the equity and debt side of the ledger allow us to further build out our talent base to serve our broker and direct borrower relationships.
GlobeSt.com: What type of growth do you envision for your company in the next year?
Doerr: Since our company's inception of the mortgage-lending business, we have continued to grow our active pipeline and loan closings, which point to an increased production year for us in 2017. Anecdotally, we have seen a significant increase to our pipeline within the past 60 days aligned with the recent uptick in interest rates. In addition to our bridge lending, we also provide institutional mezzanine capital for larger projects. Both products are becoming more active within the construction-lending area where banks have been negatively impacted by the increased regulatory environment.
GlobeSt.com: How do you see the future of the private-lending space?
Doerr: We believe that the private-debt-capital space will continue to capture more market share in the wake of HVCRE rules and other regulations. The CRE finance market is watching to see whether the Trump administration will advocate changes to Dodd‑Frank and how those changes could impact the securitization and banking side of the market; however, it's unlikely that any changes will occur in 2017, and regardless, there will always be a need for predictable private capital to meet varied and customized borrower demand. There continues to be a need for capital that can provide structuring flexibility, responsiveness and certainty of execution. We pride ourselves on our discretionary, efficient and expeditious closing process.
GlobeSt.com: What else should our readers know about your company?
Doerr: As we enter into our 18th year, Buchanan Street continues to innovate and develop new investment products for our diverse investor client base. It is evident that real estate is becoming a significant part of an investor's asset allocation, with its ability to offer fixed-income characteristics while providing tax advantages and an inflationary hedge. Accordingly, we are continuing to explore new property segments for portfolio diversification to satisfy our increased client demand.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
