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This article was produced in partnership with Pallas Capital
In recent years, commercial real estate (CRE) lending has evolved significantly. As traditional bank lending becomes more rigid, non-bank lenders have stepped in, providing flexibility and innovative financing solutions that address the unique needs of commercial borrowers.
This shift has created significant growth and untapped opportunities for brokers and their clients, particularly in the mid-market segment, where suitable debt solutions have been historically limited. Understanding this dynamic landscape is critical to staying competitive.
Brokers aiming to succeed in the CRE world need more than just good connections – they need lenders who can truly deliver. Whether it is due to liquidity needs, tight timeframes, or specific structuring requirements, brokers who can tap into the growing pool of non-bank lenders are well-positioned to serve clients looking for greater flexibility and higher gearing than traditional banks typically offer.
So, what steps can brokers take to ensure their clients get access to the best possible financing solutions for their businesses? Here are some important reminders to keep in mind when choosing the right CRE lender for your client:
This sounds obvious but in my experience it’s often not done well. The result can be costly to your client – the wrong lender or financing structure can lead to delays, higher costs, or even the collapse of a deal completely. Taking the time to fully grasp your client’s financial position, property strategy, and long-term goals ensures you’re matching them with the right non-bank lender who is going to solve for their specific needs.
Got a client with complex needs? Maybe they require higher gearing or have a tighter-than-usual turnaround? Identify lenders in commercial real estate debt, with proven runs-on-the-board handling complex transactions and a consistent track record of delivering tailored solutions for the mid-market.
Take the time to learn the lending criteria, policies, and pricing models of each potential financier. Knowing which lender aligns with your client’s needs will save time and increase the chances of approval.
Opt for lenders with experienced origination and credit teams who can conduct thorough due diligence. Experienced credit teams will want to do proper due diligence on the property put up as security for a loan, for example. A lender’s ability to assess a borrower’s financial capacity and the property’s potential is critical to structuring successful deals.
Look for financiers with a history of handling transactions similar to your clients’. Proven success with complex deals and long-term relationships in the CRE space are strong indicators of reliability.
Ensure all relevant details—such as the borrower’s experience, property condition, tenancy schedules, servicing and exit strategy—are ready to present. They’ll also want to get a full picture of a borrower’s background and experience in the area to which the loan relates. Then there will be requests for information about how the borrower intends to meet its interest repayments and ultimately exit a given deal. A well-prepared submission helps the lender understand the transaction and leads to quicker approvals.
All this sounds straightforward enough – but it’s often the simple steps that trip brokers up and lead to less-than-ideal outcomes for brokers and their clients.
At Pallas Capital, we approach each project with flexible and agile funding solutions that can be tailored to your clients’ needs.
Our specialist team is perfectly positioned to support brokers with CRE debt expertise and help them to find solutions for complex transactions that other lenders in the market simply can’t cater to.
For more information about Pallas Capital click here Financial Solutions for brokers and their borrower clients - Pallas Capital.
Pallas Capital specialises in the origination and investment management of real estate debt and equity products, providing borrowers reliable and competitive funding for their property investment and development needs. It offers financial investments in these loans to its investors, providing strong returns to its investor base through a range of risk-adjusted, property backed debt and equity investment opportunities. Pallas Capital has built a strong track record and investment book since its inception in 2016 with funds under management having grown at 100%+ p.a. over the past 4 years and discretionary funding mandates sitting at $1.4bn and growing quickly.
