Mortgage Banking

As the real estate market continues to evolve, the importance of strong lender relationships is key. Clients benefit from our long-standing lender relationships with traditional and non-traditional lenders, including life insurance companies, CMBS lenders, agency lenders, banks, credit unions, debt funds and private equity.

Lender Relationships

Capital Sources

A correspondent lender is an institution that uses the resources of a mortgage banker to lend in a particular region.

In addition to Largo’s long list of prestigious correspondence lenders, Largo has closed loans throughout the past 30 years with virtually every life insurance company in the U.S.

They maintain the loans on their balance sheets and typically focus on top tier borrowers and properties. Most life lenders lock the interest rate at application for a period up to 90 days and in some instances are able to provide forward commitments up to 12 months for additional pricing. The majority of loans originated by a life company remain in their portfolio for the life of the loan. This allows life company lenders to be more flexible with loan structures. Life companies can offer superior pricing especially for low leverage transactions in primary locations. Loan terms and amortization can be as long as 30-35 years, depending on the lender. The servicing of the loan post-closing is typically handled through an intermediary such as Largo or by the life company itself.

All income producing properties
3-30 year term / up to 30 year amortization
Self-amortizing structures available
Interest only available for conservatively underwritten loans
Non-recourse (can be used to mitigate short term issues)
Loan-to-value up to 75%
Fixed interest rate typically locked at application
Priced over corresponding treasury or average life
Premium pricing for lower leverage deals with strong borrowers
Forward commitments available up to 12 months
No on-going operating covenants
No reserves/escrows
Par loans
No cash management/depository relationship
Yield maintenance and/or structured prepay
Earn-outs
No third party servicers
Will consider recently stabilized properties
Flexible throughout life of loan
Top tier borrowers and properties

The pricing, terms, and conditions of a permanent loan vary depending upon the lender, property type, leasing status and overall market conditions. Understanding the real estate market, its economics and trends, combined with a strong and proven network of lenders consisting of Life Insurance Companies, Banks, Wall Street Conduits, Agencies, Pension Funds and Private Equity Funds, allows Largo to provide its customers with the most competitive financing available today. Largo can secure financing for loans as low as $1,000,000 to $5,000,000 through its small loan program, as well as larger deals ranging from $5,000,000 and up.

Largo has long standing relationships with many banks throughout the U.S.

Lending is typically constrained to markets where the bank has retail branches. In many instances, banks will require a depository relationship, as well as, recourse. Loan terms of 3, 5 and 7 years are most prevalent with 10 year terms offered on a limited basis.

Income producing properties, working capital, equipment etc.
5, 7, 10 year terms/up to 30 year amortization
Recourse
Price loans over varying indexes including Prime, FHLB, cost of funds etc.
Loan-to-value up to 80% for top tier borrowers
Rate locked at closing
Step-down prepayment
.25% up to 1% commitment fee
Require depository relationship
Borrower focused vs. property
Subject to exposure limits with Borrower
Construction Loans
Ongoing Loan

The pricing, terms, and conditions of a permanent loan vary depending upon the lender, property type, leasing status and overall market conditions. Understanding the real estate market, its economics and trends, combined with a strong and proven network of lenders consisting of Life Insurance Companies, Banks, Wall Street Conduits, Agencies, Pension Funds and Private Equity Funds, allows Largo to provide its customers with the most competitive financing available today. Largo can secure financing for loans as low as $1,000,000 to $5,000,000 through its small loan program, as well as larger deals ranging from $5,000,000 and up.

Largo has been working with CMBS or “Conduit” lenders since its inception in the early 90’s. Throughout that period Largo has closed loans with nearly every CMBS originator and has a unique expertise in managing the process.

In addition, conduits can provide long-term interest-only options during the term of the loan. These loans are highly structured and require on-going operating covenants. Conduits primarily quote loans with 10 year terms and 30 year amortizations. The appetite for 5 and 7 year loans can fluctuate.

All income producing properties
5, 7 & 10 year terms/30 year amortization
Non-recourse
Loan-to-value up to 75%, mezzanine financing acceptable
Rate locked at closing
Priced over swap or treasury (greater of)
Full leverage
Interest-only available
On-going debt service operating covenants ~1.25X DSC
Require reserves and cash management (hard, soft and springing lockbox)
Par loans
Defeasance prepayment
Debt yield focused (NOI/loan amount)
Third party servicer, master servicer and special servicer
“Warehouse” lender – sell off loan to various investors and maintain minimal ownership strip
Property vs. borrower focused

The pricing, terms, and conditions of a permanent loan vary depending upon the lender, property type, leasing status and overall market conditions. Understanding the real estate market, its economics and trends, combined with a strong and proven network of lenders consisting of Life Insurance Companies, Banks, Wall Street Conduits, Agencies, Pension Funds and Private Equity Funds, allows Largo to provide its customers with the most competitive financing available today. Largo can secure financing for loans as low as $1,000,000 to $5,000,000 through its small loan program, as well as larger deals ranging from $5,000,000 and up.

Largo has relationships with various government agencies to provide the most competitive terms.

The loans are priced over the corresponding US treasury and can reach a loan-to-value of up to 80%. Typical loan terms range from 5 to 30 years with up to a 30 year amortization schedule.

Multifamily and health care properties only
Up to 30 year term/amortization
Non-recourse
Loan-to-value up to 80%
Rate locked at closing
Priced over treasury
25 to 40 bps pricing advantage for affordable
Pricing based on property location, DSCR and LTV
On-going debt service operating covenants ~1.25X DSC
Interest-only available
1% Commitment Fee
Escrows/reserves required
Yield maintenance
Typically require 90% occupancy for 90 days
Bridge to permanent financing
Property and borrower focused

The pricing, terms, and conditions of a permanent loan vary depending upon the lender, property type, leasing status and overall market conditions. Understanding the real estate market, its economics and trends, combined with a strong and proven network of lenders consisting of Life Insurance Companies, Banks, Wall Street Conduits, Agencies, Pension Funds and Private Equity Funds, allows Largo to provide its customers with the most competitive financing available today. Largo can secure financing for loans as low as $1,000,000 to $5,000,000 through its small loan program, as well as larger deals ranging from $5,000,000 and up.

Credit Unions are not-for-profit organizations that exist to serve their members. As a community savings and loan cooperative they typically operate in a well defined geographic area with eligibility requirements for its members. Their products and process are very similar to a conventional bank.

Largo has relationships with the premier credit unions within their footprint. Largo has also successfully transacted with “national” credit unions that forego membership requirements and lend on a nationwide basis.

3,5,7,10 year terms/up to 30 year amortization
Typically price loans over Prime Rate or Correlating US Treasury
Fixed Rate
Typically Rate Resets for 10 Year Terms
Very Borrower Focused
Construction Loans
Limited to no depository relationship, can expect asset operating account to be held with CU
Predominantly No Prepayment Penalty
No Intangible Tax due at closing due to non-profit status
Eligibility Requirements based on domicile of sponsor
LTV typically does not exceed 75% LTV
.25% - 1% commitment fees
Full Recourse

The pricing, terms, and conditions of a permanent loan vary depending upon the lender, property type, leasing status and overall market conditions. Understanding the real estate market, its economics and trends, combined with a strong and proven network of lenders consisting of Life Insurance Companies, Banks, Wall Street Conduits, Agencies, Pension Funds and Private Equity Funds, allows Largo to provide its customers with the most competitive financing available today. Largo can secure financing for loans as low as $1,000,000 to $5,000,000 through its small loan program, as well as larger deals ranging from $5,000,000 and up.

Real estate debt funds are pools of private equity-backed capital that invest in shorter term, non-recourse debt, preferred equity and mezzanine loans. They have steadily increased their market share in the capital markets space since the Great Recession and now account for over $250billion of annual transaction volume. These funds are typically focused on specific asset types, investment sizes and geographies.

Debt funds allow greater flexibility and creativity than conventional lenders, especially for value-add, redevelopment and recapitalizations. $100+billion of capital is raised annually on behalf of private debt fund managers. Due to the large volume of debt funds (200+ and constantly growing) it is important to utilize a group like Largo who is consistently active in this ever evolving landscape.

3,5,7,10 year terms/up to 30 year amortization
Typically price loans over Prime Rate or Correlating US Treasury
Fixed Rate
Typically Rate Resets for 10 Year Terms
Very Borrower Focused
Construction Loans
Limited to no depository relationship, can expect asset operating account to be held with CU
Predominantly No Prepayment Penalty
No Intangible Tax due at closing due to non-profit status
Eligibility Requirements based on domicile of sponsor
LTV typically does not exceed 75% LTV
.25% - 1% commitment fees
Full Recourse

The pricing, terms, and conditions of a permanent loan vary depending upon the lender, property type, leasing status and overall market conditions. Understanding the real estate market, its economics and trends, combined with a strong and proven network of lenders consisting of Life Insurance Companies, Banks, Wall Street Conduits, Agencies, Pension Funds and Private Equity Funds, allows Largo to provide its customers with the most competitive financing available today. Largo can secure financing for loans as low as $1,000,000 to $5,000,000 through its small loan program, as well as larger deals ranging from $5,000,000 and up.

Finance Options

Largo Secures $169 Million for Grocery Anchored Retail Portfolio

Kevin Heiss, Managing Director of Largo, secured $169 Million loan to refinance the existing debt on a high quality, cross collateralized pool of grocery anchored shopping centers.

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Acquisition

Largo Secures $19MM Acquisition Financing for Industrial Portfolio

Neal Colligan, Principal at Largo Capital’s Philadelphia office, arranged acquisition financing for an eight-property, multi-tenanted industrial portfolio in Jacksonville, Florida. The Borrower was offered multiple quotes from various financing sources before accepting a transaction from a regional banking source.

The deal featured a 5-year fixed rate, an interest-only period and additional funding for TI and CapEx. The transaction was completed in accordance with the acquisition timeline.

Largo Capital Arranges $10.5MM in Construction Financing for Self-Storage Facility in Port St Lucie, FL

Tim Finiki of Largo Capital arranged $10.5 million in financing for the development of an institutional quality, 815-unit self-storage facility in Port St Lucie, FL. Finiki arranged a 99-year ground lease from an investment management firm along with a 10-year term and 25-year amortization on a senior loan from a Texas-based, privately held financing company.

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Largo Secures Preferred Equity for Boutique Hotel Construction Project

Tim Finiki, Vice President of Originations at the Largo Group of Companies, secured preferred equity financing for the construction of a $31MM full-service boutique hotel located in Austin, Texas.

Finiki secured a preferred equity partner that could work creatively with the hotel developer, land developer and senior lender. Construction is set to begin in the spring of 2020 with completion in 2021.

Tim Finiki
O: 716.204.2206 | C: 716.359.0451
E: tfiniki@largocapital.com

Largo Arranges $88.3MM of Debt Financing for the Acquisition and Repositioning of Two Office Buildings in Burnaby, BC

Kevin Heiss, Managing Director of the Largo Group of Companies, secured $88,300,000 of debt financing for the acquisition and repositioning of two office buildings located in Burnaby, British Columbia.  The two buildings total 251,000 square feet and are located in Metrotown, Burnaby’s primary commercial district. The renovation will restore the complex to Class A quality office product.

Heiss worked on behalf of the borrower to arrange a three-year, interest only loan with two 12-month extension options through one of Largo’s correspondent life insurance companies.

Largo Secures $10.5M Bridge Debt for Michigan Shopping Center

Shelby Township, MI – July 9, 2019 – David Carswell, Managing Director of Largo’s Manhattan Office, arranged $10.5 million in financing for a 160,000 SF shopping center in Shelby Township, MI.  The shopping center is ideally located in the heart of one of Michigan’s premier retail markets directly across from the 1.5 million SF Lakeside Mall.

Carswell was able to secure a short-term bridge option at a competitive rate on behalf of the borrower through one of Largo’s correspondent life insurance lenders.  The transaction was creatively structured while still maintaining non-recourse, fixed rate, interest-only bridge debt to facilitate the landlord’s efforts in lease up and seasoning after the loss of a long term, big box retail anchor tenant.

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