Bolour Associates is expanding its private lending business. The firm will be active in 16 states and Washington DC, and it expects to triple the size its private lending business and double its staff by the end of 2020. The move is an effort to diversify the business while taking advantage of the ample capital available in the market.
“We are expanding the lending platform for many reasons, but number one is the diversification of our platform and our portfolio,” Mark Bolour, CEO of Bolour Associates. “We are seeking growth through diversification, rather than growth in a centralized market, like California. We have access at this point to a tremendous amount of capital to lend, and while the capital is available, we don't want to concentrate it in one geographic area. We want to spread it.”
In addition to the internal growth goals driving the expansion strategy, Bolour says there is also increasing demand for private, alternative lending sources. “There is market demand for private lending, and that demand has been there since the financial crisis,” he says. At the same time, as we have grown, our internal strategy has been to create more diversification in our portfolio.” As that demand has remained steady, Bolour says this is a good time to expand the business.
As the company grows, its core business model will not change. The company will continue to target emerging markets adjacent to major metros across the country and will remain focused on development and redevelopment deals. “We primarily lend to developers, and about 70% of our business is pre-entitlement and pre-construction financing on urban infill land, mostly in gateway cities,” says Bolour. “The remainder of our business is focused on repositioning assets. Those projects include retail assets, office assets and working with owner-users on industrial properties.”
While the business is growing, Bolour sees an opportunity to learn and understand new markets, which could be beneficial for other aspects of its business. In addition to lending, the firm plans to buy more than $300 million in commercial real estate product this year, and it has a development pipeline of $500 million in ground-up projects across asset classes. “This also creates a learning curve for our company to enter and understand new markets through our lending platform,” he says.
Still, he has big goals for the private lending business as well. “In the first 12 months, we will focused on building out the infrastructure of the company in the states that we are expanding into, which will include marketing and outreach,” says Bolour. “We are working daily to expand that reach. We are looking to do about $50 million per year in each state that we have identified in private loans.”
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Kelsi Maree Borland
