Are customers moving away from larger banks to smaller ones?
Most of our clients actually come from the larger banks. When it comes time in a situation like this, their clients realize that they don’t get the service, they don’t get the call, they don’t get the attention. When things are going well, it’s easier to overlook that.
What types of projects have you paid the most interest as a real estate lender in the past year?
I’m not sure anybody had any strong appetite for ground-up construction loans in the last 12 or 14 months. With that said, we saw a ton of projects coming off construction, meaning they were just getting done and looking for that two-year bridge loan. So we saw a ton of volume in that space. We saw a lot of activities by existing banks restructuring the loans. That’s why you’re not seeing a lot of nonperforming assets showing up in the marketplace.
Are lenders working with landlords to deal with the distress in the market?
For existing loans that are coming up on maturity, banks were all very proactive in restructuring them. This crisis wasn’t a financial services crisis, unlike 2008 and 2009—that was a bank liquidity crisis. Banks are all sitting on a ton of liquidity, so there was no reason not to find all sorts of ways to support customers. It’s not a true financial crisis in a self-inflicted way. They’re hoping that there will be an answer to this, and as long as they’re strong enough, they said, “We’ll wait it out.”
Why are banks slow to repossess properties?
I always remind people that banks are banks. They’re not in the business of being a real estate owner. Everybody thinks that banks are quick to take property back, but I’m always shaking my head. No, no, no. We are here to lend you money. That’s how we make money. We don’t make money if we have to take property back.
What projects are you comfortable financing right now?
We’re trying to get comfortable with retail in certain neighborhoods. We as a bank have always been comfortable with industrial. And with how things have pivoted to e-commerce, there’s a lot of opportunity. And especially in the New York area, there’s a shortage of warehouses that are actually available.
