Legacy Small Balance Commercial Real Estate Loan Portfolios
David Tobin, Principal, chats about legacy small balance commercial real estate loan portfolios in this new video.
Legacy portfolios, which is to say portfolios of loans originated pre-financial crisis, are trading at extraordinary prices relative to intrinsic value. The reason for this is higher than market coupons, long payment history and solid economic fundamentals combined with intense market liquidity from bank and non-bank sources. The opportunity to exit these portfolios in as little as 45 to 60 days exists in the marketplace. And it’s a good sound judgment call to exit portfolios of loans which are above market but which have not prepaid in this highly liquid market post-financial crisis. We expect that these portfolios will exhibit elevated levels of default as well as elevated losses compared to their post-financial crisis-originated counterparts. Banks would do well to liquidate small-balance commercial real estate loan portfolios at peak market pricing today and redeploy those proceeds into other alternative lending opportunities.
ABOUT WILLIAM DAVID TOBIN | PRINCIPAL
William David Tobin is one of two founders of Mission Capital and a founder of EquityMultiple, an on-line loan and real estate equity syndication platform seed funded by Mission Capital. He has extensive transactional experience in loan sale advisory, real estate investment sales and commercial real estate debt and equity raising. In addition, Mr. Tobin is Chief Compliance Officer for Mission Capital.
Under Mr. Tobin’s guidance and supervision, Mission has been awarded and continues to execute prime contractor FDIC contracts for Whole Loan Internet Marketing & Support (loan sales), Structured Sales (loan sales) and Financial Advisory Valuation Services (failing bank and loss share loan portfolio valuation), Federal Reserve Bank of New York (loan sales), Freddie Mac (programmatic bulk loan sales for FHFA mandated deleveraging), multiple ongoing Federal Home Loan Bank valuation contracts and advisory assignments with the National Credit Union Administration.
From 1992 to 1994, Mr. Tobin worked as an asset manager in the Asset Resolution Department of Dime Bancorp (under OTS supervision) where he played an integral role in the liquidation of the $1.2 billion non-performing single-family loan and REO portfolio. The Dime disposition program included a multi-year asset-by-asset sellout culminating in a $300 million bulk offering to many of the major portfolio investors in the whole loan investment arena. From 1994 to 2002, Mr. Tobin was associated with a national brokerage firm, where he started and ran a loan sale advisory business, heading all business execution and development.
Mr. Tobin has a B.A. in English Literature from Syracuse University and attended the MBA program, concentrating in banking and finance, at NYU’s Stern School of Business. He has lectured on the topics of whole loan valuation and mortgage trading at New York University’s Real Estate School. Mr. Tobin is a member of the board of directors of H Bancorp (www.h-bancorp.com), a $1.5 billion multi-bank holding company that acquires and operates community banks throughout the United States. Mr. Tobin is a member of the Real Estate Advisory Board of the Whitman School of Management at Syracuse University and a board member of A&M Sports / Clean Hands for Haiti.