Lenders - how is your deal team structured?
I work at a BB in a CRE group that does loan origination (senior lending, both balance sheet and CMBS) for multifamily assets. I'm curious how other banks organize their deal teams. We have a lot of people involved. Sometimes I wonder if other CRE groups run a leaner operation.
Senior Originator - manages relationships with clients, brings in business, handles high level negotiations
Originator - gets initial screening approval for the deal, puts together term sheets, then runs the deal - manages third party reports, assists with legal negotiations, works our pricing desk during the rate lock process, run call with the borrower and counsel to iron out any issues.
Analyst or Associate - supports the originator and senior guy. Responsibility include prescreening deals, collects proformas from borrowers and does the initial loan sizing and structuring, does things the Originator is too busy to do/doesn't feel like doing (eg - getting an answer from the the borrower about something requested by the KYC team).
Underwriter - underwrites the deal, models it, puts together the credit memo, presents it at final committee
Transaction Manager/Loan Closer - manages due diligence (collects it from the borrower, organizes it, saves it), documentation and closing processes, ensures approvals are met prior to closing, works with GSEs and processes the commitment and delivery of loans we sell to them, coordinates boarding process loan servicers (third party).
The Originator, Analyst/Associate and Underwriter are technical roles. The Senior Originator presumably has technical knowledge as well but spends most of his/her time on the phone with clients these days. The Transaction Manager is a coordinator role, no technical skills.
That's just the core team, there are also all the internal groups within the bank the deal team works with on each loan closing (KYC, Construction Risk, Risk, internal Counsel, pricing desk, the ops group that books the loans), plus third parties such a external counsel.
How are other teams organized?
Great question! I don't know firsthand, but I have met with several MM groups and they are structured anywhere from 1-2 Sr. Originators, 1-3 Analysts and Associates, maybe 1 VP with internal credit from all the main banks lines corp, cre, etc approving the loan. I believe this lender did about $300mm in vanilla whole loans last year for MF and Class B office.
While I only have experience from the desk I currently sit on - that certainly seems like a lot of hands on deck..
My team has the head of the group whose sole job is okay the deals going out the door, have a line of sight into the overall portfolio, and provide some sizing/structure guidance to the investment managers (originators)
Then we have 4 originators broken out by region (all sit in one location though) they do everything from sourcing deals, underwriting, investment committee write-ups, quoting and closing deals (although we lean heavily on counsel)
Then myself, the sole analyst that mainly supports debt and equity on the west coast but also helps where needed on other items..
This team does primarily short-term/bridge debt on all the major property types, a handful of equity deals a year and also has a pretty good size LIHTC portfolio and pipeline...between all 3 platforms, the team does a little over $400m a year
I feel for you bud. Sounds pretty brutal.
Seems like a large group, but can you put it in perspective for us? Approximately what volume do you expect to originate in a year with that staff?
Total group headcount is ~200 (that includes subgroups that support closing processes such as KYC, Legal, Construction Risk, as well as subgroups not directly involved in loan origination, eg - Asset Management, Construction Loan Servicing, Data/Tech, plus a small subset that does equity investments and special sits stuff). Headcount for people in the roles listed above is approx:
30 - Senior Originators, Originators and Analyst/Associates 25 - Underwriters 15 - Transaction Managers/Loan Closers
Total $ lent in one year is ~$4bn. Average loan size is ~$20mm.
This is primarily a cmbs group
6-7 Originators 3-4 VPs 9-10 Analysts/Associates 3 Legal guys KYC & appraisal review are a separate division
There origination & UW team is the same - meaning the team that sizes, quotes and apps the deal is the same that does the final underwriting, credit memo and committee presentations.
Thanks for the insight. Who handles all the soft/organization tasks if there are no closers on the deal team?
What exactly do you mean by 'soft/organization' tasks? We do have deal closers but those are the legal guys who help draft the term sheet and communicate with our legal counsel to help draft the loan docs.
If you mean organization of docs, requesting DD and asking questions, that is done by the deal time (normally analysts/associates).
I've heard of groups where the Originator/UW are one in the same and does exactly as you mentioned above. Not sure if my group separates the roles because it's a large operation people become more siloed. Our originators will do the initial sizing, quotes, apps, and get initial screening approval, but after that the the final underwriting, credit memo and committee presentation is done by an UW.
I've always thought it's an odd split of responsibilities.
I think it really depends on how large the deal is and what type of execution is required.
At my shop, technically, there is an originator, analyst (preliminary due diligence), underwriter, and internal legal (closer). Of course there is Lender's counsel, appraisal review people, engineer review people, environmental review people.
However, I work hand in hand with the securitization team which includes a structure person, trader, rating agency person for CMBS stuff too. And on the very large portfolio's deals, you have people in different offices working.
Hey, thanks for the response! The Loan Closer/Transaction Manager role seems to be few and far between at other places.
Different titles but same format. In my experience (6 years of LevFin across 2 geographies):
Team of c.10
3-4 analysts/associates: run due dil., build model & sensitivities, write credit paper (also work on RFPs when required)
3 VPs: x-check all the work from A/AN, leads negotiations on term sheets, facility agreement and all other legal docs, main contact point with credit committee to get the deal approved internally, main contact point re: day to day contact with client.
VPs typically also coordinate all the painful internal processes (get sign-off from internal legal, get facility & security agent happy, make sure KYC is done etc., make sure all internal policies are complied with and if not that you get sign-off from the relevant gods of the bank)
Ds will be much closer to the day to day execution if the deal is an elephant deal or if it was originated from a group head or someone super senior at the bank (i.e. the CEO promised his best mate that the bank would lend his business $2bn no problem, 'just get it done')
Hi, thanks for the response. This is insightful. The tasks all seem fairly similar to where I work, but the division of responsibilities among the deal team is different.
In the above format, all legal work (outside of commercial realm) is done by external counsel. There is usually 1 in-house dude but he keeps it to the internal policies / procedures and anyway you can't reach him after 6pm
All the negotiations are done by the VPs or the Ds and it's also their jobs to check the legal fees don't balloon and go completely outside the scope of work / cap as otherwise the client is pissed off and wants you to pay for the extra...
I have an interview coming up for a MM lender as a "Multi Family Production Analyst".. where would that fall under? Is it more ops/BO or is it a solid role?
Need a job description to be sure, titles vary pretty widely from firm to firm. Assuming its not BO, sounds like the analyst role where you will be managing initial screening, collecting and checking DD etc. Feel free to PM if you don't want to post.
Should be a solid role. Production = Origination. You'll learn the technicals mentioned here - prescreening deals, building models, stress tests, etc.
nothing wrong with asking the set of requirements when on the job during the job interview
brosephstalin @CIAC07" hklevfinbanker
Thanks guys. This seems like a solid opportunity, do you have any advice on nailing the interview?
If you're still in school, I'm assuming questions will mostly be fit/personality. Maybe someone will ask you to walk them through how you would value an asset? If you're going in talking about courses you completed RE finance, interviewer may test some quick math skills/familiarity with terminology, eg "What's the value of an asset w/$11mm NOI at a 4 cap?" Just my 2 cents.
Thanks. I've been out of school for about year in non RE back office role, but I did do my Junior year internship at a small RE brokerage company. I'll spend some time this week going over RE finance concepts.
4 Senior Originators 4 Originators 3 Loan Analyst/Associates 2 Loan Closers
withloveLT what type of lender are you? Balance sheet(BB/MM?), Debt Fund? etc..
Are you at a bank?
I'm at a life co:
East team is 1 Sr Director (lead), 1 Director, 3 Sr. Associate/Associate West team is 2 Sr. Directors (1 lead, 1 team member), 2 Directors, 1 Sr. Associate 1 group analyst
Closing, legal, risk, appraisal, insurance, teams are separate.
If you don't mind me asking, how does your team (directors/associate/analyst) collaborate with the closing folks? Do you mind elaborating on the division of labor? Based on the feedback I've seen on this thread, it looks like a split between shops that have the loan closer role, and those that do not. It seems those that do not have the loan closer role have an analyst handle the tasks performed by the loan closer.
at shop that does cmbs & bridge.
2 product heads (cmbs/bridge) 6 originators 6 underwriters 1 asset manager 2 analysts (one for UW and one for AM)
the securitization team is a subset of the above.
Thanks everyone for the feedback. For the groups that have a Transaction Manager/Loan Closer role, do you mind elaborating about what exactly they handle? In my group, this person comes onto the deal team after a deal gets committee's prescreen approval, and the borrower has signed a term sheet and wired us an application deposit. At this point the deal is somewhat baked, the originators have already reviewed the borrowers proforma and operating data, done the initial analysis to determine sizing, structuring, pricing, and negotiated the initial terms that are outlined in the term sheet.
The Transaction Manager runs due diligence (although some DD was collected to put together the initial analysis, there's still a ton of additional documentation that needs collected), organizes the DD, gets DD to various parties that need it (UWs need operating data, KYC needs organizational docs, Construction Risk needs Plans and Specs, etc). They also handle a few one off tasks, such as running flood certification, engaging for some of the third party reports, and running credit checks on deal participants. Then they manage the operational tasks involved in closing the loan, such as running through a checklist to ensure all conditions to fund are satisfied, asking the operations team to wire the loan proceeds to title, getting documentation to the operations team who enter the economic terms into a risk management system, getting documentation to the loan servicer, and updating an internal deal management system used by the group. There's also the additional responsibility of managing the commitment and delivery process to GSEs, which is more of organizing documents and getting them into the GSE's own document management systems.
Are other teams organized similarly?
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