We Understand Conduit Loans
Because our bread-and-butter business has been sourcing new CMBS debt for existing commercial properties we have developed a deep understanding of the securitization process, the intricacies involved in how servicers and special servicers manage their portfolios, prepayment considerations including defeasance and yield maintenance, and the commercial real estate property value complications that have come along 10 years after financing at the peak of our last cycle. It is important to understand that not all CMBS loans are created equal and that terms, spreads, prepayment penalties, leverage, and property valuation considerations vary by provider and as such it is important to work with a market expert that has no conflict of interest.
No Conflicts Of Interest
Did you know most conduit lenders service their own loans? Did you know many of the big brokerage and advisory shops do to? Of course you did! Did you ever consider the implications of that? Every 10 basis points your CMBS lender increases your spread by, equates to a 1% bump to their bottom line... and off yours. That means if a broker or lender charges you a 1% fee and and earns an extra 30 bps in the spread by making a bias decision, they are potentially earning an additional 3% on your loan! The higher your rate is, the better the servicers, brokers, and lenders profit. Well, guess what? We are not a conduit lender, servicer, or biased broker with preferred affiliations that pay us on the backend. We function strictly as a financial intermediary and do not service our loans because we believe it is a giant conflict of interest. We keep it simple. We charge .75bps (3/4 of 1%) of the total loan amount paid out of closing. Our time isn't spent servicing existing loans to make extra money, it's spent leveraging our database of lenders to drive down loan costs, spreads, and prepayment costs for our borrowers. The end result? Complete transparency; you make more money, Wall Street makes less (because let's face it, they've made enough off real estate entrepreneurs).
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