Mission Capital’s Jordan Ray was named one of RE Forum’s Fifty Under 40 for 2017.

Commercial real estate used to be a niche field in terms of career trajectories. If it wasn’t a family business, a young professional typically found him or herself in the industry by accident. Yet thanks to the growth of CRE-specific higher education programs, the discipline has become a leading career choice.

And thank goodness for that, since it’s attracted some of the best and brightest talent of the latest generation. This was evidenced in the hundreds of nominations we received for Real Estate Forum’s most recent “50 Under 40” feature. These remarkable, high-achieving and innovative young professionals made their marks in various ways, from closing billions of dollars’ worth of transactions to creating products that promise to alter the way we do business.

The finalists also exhibited a unifying commitment to professional growth, be it their own or that of others, through mentoring students and younger colleagues or focusing on clients’ individual needs. In addition to earning reputations for intelligence, diligence and client dedication, many of the candidates exhibited an uncommon drive in caring about humanitarian causes. One rode a bicycle cross country to raise money for lung cancer research, another presides over one of the largest NGOs promoting literacy in India and one even rappelled the Omni Building in Nashville for Big Brothers Big Sisters.

The diverse strengths and accomplishments demonstrated by the young women and men who made it into this year’s roster provide an encouraging glimpse into the future of the industry.


Jordan G. Ray, 38
Mission Capital Advisors
New York City

Possessing a remarkable proficiency in securing capital for a wide range of real estate projects, Jordan Ray was instrumental in building out Mission Capital Advisor’s finance desk, which operated as just a two-person team when he took over. Founder David Tobin, who had firmly established Mission Capital’s commercial and residential loan operations, partnered with Ray to start a “counter-cyclical” hedge to the loan sale business, with a unit raising capital for CRE investors in a technologically progressive way. Working with the firm’s in-place infrastructure, Ray helped create a well-rounded company with both cyclical and counter-cyclical business lines. Under his guidance, the finance desk has grown into a national mortgage and equity brokerage that employs 22 professionals, closes approximately $2 billion in annual deal volume and is active in every major US market.


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LIBOR and Commercial Real Estate: What’s Next by Jillian Mariutti

As originally published in Commercial Observer on October 11, 2017.

Though hardly unexpected, the recent news that the London Interbank Offered Rate (LIBOR) will be phased out by 2021 is extremely significant. The standard international benchmark for floating-rate transactions, LIBOR was created to be a risk-free benchmark for variable-rate loans and derivatives. But while the index currently underpins approximately $350 trillion of financial instruments—including credit card debt and student loans in addition to commercial real estate—a series of scandals relating to LIBOR manipulation has discredited the index and spelled its subsequent demise.

Fortunately, the formal announcement about the LIBOR phase-out didn’t lead to any immediate market unrest, as liquidity has remained strong and market participants have seemed to take the news in stride (largely due to the news being widely anticipated following LIBOR’s well-publicized scandals). It is also important to note that many instruments—especially CRE bridge loans, which frequently have three-year terms—should not be affected, as they will reach maturity before the phase-out in 2021.

In the United States, LIBOR will be replaced by the Broad Treasury Financing Rate (BTFR), a transaction-based index overseen by the Alternative Reference Rate Committee that should be less prone to manipulation than LIBOR. BTFR will have the same stated goal as LIBOR—to serve as a benchmark representation of the risk-free borrowing rate—but as a transaction-based index, it may be somewhat prone to volatility. That said, BTFR will be rolled out in 2018, a full three years before LIBOR’s retirement, providing ample time for the Committee to monitor the inputs going into BTFR and fine-tune a formula that smooths extreme daily fluctuations. With the ability to refine BTFR from 2018 to 2021 while monitoring its spreads with LIBOR, we can expect the landscape for CRE borrowers in 2022 or 2023 to be quite similar to that of a decade earlier, albeit with a different benchmark for their loans.

The biggest challenge associated with the transition to LIBOR will be experienced by instruments originated with the LIBOR benchmark that extend beyond 2021. For commercial real estate investors, this includes not just loans but derivatives, as many borrowers with a floating-rate CRE loan are required to hedge their interest-rate risk with caps or swaps, generally based on LIBOR.

Hedge accounting is another area that may be caught in the crosshairs of the LIBOR-BTFR transition. Hedge accounting allows the mark to market of derivatives, which are extremely volatile, to sit in the “Other Comprehensive Income” section of the balance sheet, preventing major swings in present market value from impacting earnings figures. Regulations for this accounting method have changed several times over the past decade, and the LIBOR phase-out adds another confounding wrinkle to the process.

The saving grace for some real estate investors will be the terms laid out in loan documents, many of which included clauses that delineated what would occur in the event LIBOR didn’t exist for the entire term of the loan. However, alternatives such as replacing the index with the Fed funds rate plus a specified spread, will only go so far: By and large, these clauses were not heavily negotiated or even examined closely before being rubber-stamped, and some CRE investors are sure to be blindsided when they go into effect.

With LIBOR finally being terminated in 2021, it is certainly incumbent on any investors taking out loans with maturity dates beyond 2021 to examine terms closely and calculate what the transition to the new benchmark will mean for them. For some real estate investors, replacing LIBOR with another index could increase interest rate expenses and potentially require material modifications to their investment strategies. With floating-rate loans in this state of flux, prudent investors will seek the counsel of advisers before finalizing any loan terms that extend beyond 2021.

When LIBOR was developed in 1986, it brought uniformity to parties dealing in a range of financial instruments by providing institutions and borrowers with a negotiated index for floating-rate loans. While the LIBOR model has proved faulty, we can expect BTFR to be a worthy replacement once it incorporates enough transaction volume and has its kinks ironed out. The most important takeaways for the real estate investor, however, are to be cognizant of the significance of relevant loan terms and to ensure that they are fully prepared for what they are facing in this evolving landscape.

Jillian Marriutti is a director in Mission Capital’s debt and equity group. She can be reached at jmariutti@missioncap.com


Industry Veteran Brings Nearly 15 Years of Experience to his New Position

Mission Capital Advisors today announced the hiring of Daniel O’Donnell as managing director of sales and trading. Based in Mission Capital’s Dallas office, O’Donnell is responsible for sourcing, evaluating, structuring and executing the sale of performing and non-performing loans and commercial real estate assets, as well as sourcing debt and equity placement opportunities.

“Dan’s extensive background aligned perfectly with Mission Capital’s target growth areas and quite frankly, we would rather work alongside Dan then compete with him,” said David Tobin, principal of Mission Capital Advisors. “We’re confident that he has the right set of skills to elevate our loan and real estate sales practice, bringing immediate value to our client base.”

Prior to joining Mission Capital, O’Donnell was a managing director with Holiday, Fenoglio, Fowler L.P. (HFF) in the firm’s National Loan Sales Group. He was also formerly vice president of U.S. acquisitions for FirstCity Financial Corporation, where he was responsible for individual asset and portfolio due diligence, including credit quality evaluation, real estate valuation and business collateral valuation. He was also involved in the ongoing credit decisions related to the restructuring, servicing and settlement of acquired loans and properties. During his time at FirstCity, O’Donnell was involved in the acquisition and management of more than $2.1 billion of commercial loans.

“Mission Capital has exceptional diligence systems and portfolio valuation capabilities it utilizes for clients like the FDIC, the Federal Home Loan Bank system and for private sector banks, which will expand my set of tools available to customers,” said O’Donnell. “As Mission Capital continues to grow, I’m thrilled to join a firm that demonstrates professionalism that is second to none and welcome the opportunity to further expand the company’s activity in loan and real estate sales.”

O’Donnell also previously worked for Bank of America in its Private Wealth Real Estate Group where he was in charge of a portfolio of approximately 625 properties across the Southeast. He received his Bachelor of Business Administration from Baylor University with an emphasis on finance and real estate.

The commercial real estate market is awash with capital at the moment, but its not only the industry vets that are closing deals and blazing trails.
Commercial Observer’s 25 Under 35 list showcases the industry’s top debt originators and brokers under the age of 35. Mission Capital‘s Jamie Matheny (Vice President, Debt & Equity Finance Team) has been included in the list.

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