"Off Market" Debt Financings
I work for a debt fund who does financings anywhere from $50mm on the very low end to $1B+ on the high end, and about 90% of the deals we do are the result of fully brokered processes (JLL, W&D, C&W, etc). However, I have friends working at smaller debt funds where the majority of their deal flow supposedly comes directly from sponsors / off market. At the size that we play in, is it possible to get off market / direct deal flow from establishing relationships with sponsors? Or are most transactions of our size intermediated? Thanks.
My experience has been the opposite. Smaller deals more likely to get brokered. Larger deals/larger sponsors have the level of sophistication to get things done themselves.
Are you dealing with a lot of special situations/high complexity transactions? Stabilized multifamily deals of that size are rarely brokered. Since it’s just a pricing exercise between the agencies and lifecos.
Interesting - thanks for the insight. Our loans run the gamut across stabilized / value add / construction / special situations - but across all four buckets, it seems like the vast majority of our deal flow is brokered. I originally had similar thoughts to you, but we see a ton of flow from Eastdil for the likes of Blackstone/Starwood/etc, all of which have pretty developed capital markets teams.
Yes - it is very possible. I work for an REPE top 20 firm in a capital markets role and we finance every deal in-house (i.e. no broker, direct to lender). Most of our deals are in excess of $50MM but we will arrange down to $10MM given the scope of our relationships.
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