Best construction lenders out there?
Which are the best ones, more specifically for multifamily? For everything from the small 3-4 unit buildings to the big 250+ units
Trending Content - Real Estate Forum
| +49 | What Is Your Backup Plan? | 21 | 3d |
| +39 | Long Game: Development vs Asset Management | 14 | 1h |
| +36 | AvalonBay Equity Residential Merger discussion | 16 | 4d |
| +34 | Future of Real Estate | 9 | 4d |
| +28 | Extremely Slow Ramp Up | 5 | 3d |
| +22 | CRE Banking @ Top 3 Bank or Asset Management at Public REIT | 13 | 2d |
| +19 | Future of Multifamily | 7 | 37m |
| +19 | Most Correct Way to Grow Rents in MF Development Underwriting | 4 | 20h |
| +17 | No IB RO considering RE | 6 | 5h |
| +17 | PGIM investment analyst low pay | 14 | 13h |
Career Resources
Your local relationship bank
The cheapest rate and least amount of structure. But in all seriousness, this is such a broad question and hard to answer as lenders chase different product and like/dislike certain scenarios. So it’s hard to make this generalization. The best construction lender for a 250 unit project in the NJ suburbs may not be the best lender to execute on a similar project in NYC.
I'm a mortgage broker focused on arranging construction financing. DM me if interested we have a stable of 50+ construction lenders (recourse and non-recourse). A controlled auction process is the best way to get it done...you need to get the lenders competing against each other.
Lol at the post. There are literally D/E brokers who specialize in sourcing this. Generally speaking HUD is the best bet if the timeline, project and sponsorship works for it. Otherwise hit up your shop's banking relationships (national or willing to follow the client) or a broker located nearby the project that has solid relationships with the regional banks.
Fortress
As nobody has really responded, here's my experience with banks and construction loans (all on institutional 100-500 unit buildings). Note that your experience may vary significantly with different relationship managers/relationship etc. I'm also not including debt funds/life cos since you asked about banks. When I say good I mean that they're getting to what we think market terms are (~60%-65% LTC, L + 225 rate, etc.)
Wells Fargo - Not great, they'll get you a decent rate, but they never get there on proceeds, honestly not sure how they even make construction loans.
JP Morgan - Similar to Wells Fargo, but they've heavily indicated that if you have other services with them (treasury, subline, etc.) you'll probably have a better experience
CNB - Good, usually pretty aggressive on proceeds/terms. Generally pretty flexible around proceeds, loan term, covenants, etc.
PNC - Good in general on proceeds, term etc., if you're looking for some kind of construction to perm this is more up their alley. Haven't done a deal with them in a year or two, but they've been smart/reasonable as issues have come up.
Comerica - haven't done a deal with them in a while and they haven't been competitive on proceeds or rate on the offerings we've done in the last year.
Bank of America - Generally competitive, we're about to close a deal with them at about 60% currently with them on rate/proceeds (we're typically targetting 65%-70%), but this deal was a bit of a stretch and nobody else could get to 65% either. They were out of the market a bit during covid, but have come back pretty aggressively.
I've probably dealt with some other banks, but these are the ones we have active/former deals with.
Eius quasi molestias et ullam. Aut et nihil suscipit animi reiciendis. Itaque et id omnis. Eum harum quae eius iusto itaque cupiditate.
Nam sed asperiores qui. Suscipit reprehenderit nam assumenda harum voluptatem. Porro est eligendi culpa dicta accusamus quo. Saepe quae dolorum vero veniam. Voluptate perferendis minus praesentium corrupti.
In nisi quis corrupti consequatur. Inventore totam quaerat veniam quo. Et consequuntur porro dicta eius amet temporibus. Sint ea ducimus et molestiae. Explicabo illum est eos perspiciatis architecto ut.
Magnam distinctio illo minima et commodi repudiandae quia molestias. Assumenda deserunt beatae consequatur aut nulla iste quasi. Dicta quo vero commodi rerum deserunt dolore quo consequatur. Eum repellendus dolores dolorem voluptate. Aperiam tenetur enim vero et sapiente et. Id consequuntur labore cumque enim velit accusantium.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...