Commercial Real Estate Finance: FAQ's
As one of the country's leading commercial real estate investment banks Pacific Security Capital offers a broad array of services which can sometimes lead to confusion for a client who has not worked with us in the past. The following links will provide you with the answers to the most commonly asked questions we receive from new borrowers:
Q: Is Pacific Security Capital a direct lender?
PSC is both a direct lender and an intermediary. This gives our borrowers the broadest possible access to capital as we can fund a transaction on a portfolio basis or on behalf of one of our capital partners or investors. As an investment bank we serve as principal in all our closings whether they are portfolio loans, securitized or agency transactions.
Q: What are Pacific Security Capital's minimum and maximum loan amounts?
For most asset classes our minimum loan amount is $3MM and we have no theoretical maximum loan amount (however it is likely that anything in excess of $100MM will be syndicated or participated-out). The following sizing guidelines can be used as a rule of thumb:
- Multifamily: Due to our strong current appetite for acquisition and refinance of multifamily assets we have the ability to fund down to $750K.
- Retail: $3MM minimum on all retail assets with the exception of low leverage net leased investments where we will consider loan amounts down to $1MM.
- Office: $3MM minimum for suburban and central business district Class A office. Will consider Class B space with a strong sponsor.
- Industrial: $2MM minimum for all industrial/flex assets.
- Hospitality: $5MM minimum for hospitality assets. Only stabilized, flagged properties with good RevPar trends will be considered.
- Construction: PSC is a large balance construction lender and will not consider requests of less than $20MM.
- Mezzanine: PSC will consider mezzanine requests of $4MM or more for the aforementioned asset classes. PSC requires a minimum sponsor coinvest of 5%-10% based upon sponsorship suitability and project strength.
- Equity: PSC will consider equity requests of $5MM of more for the aforementioned asset classes.
Q: What kind of fees does Pacific Security Capital charge?
PSC offers par pricing on all institutional quality permanent financing. Construction loans, Structured transactions or deals with underwriting issues may incur loan fees above par. Additionally PSC does not charge upfront fees (advisory services nonwithstanding) for its loans. There is absolutely no cost or obligation to the sponsor until we issue a formal Loan Application at which time we'll ask for a standard application fee to cover third party costs like any other lender. However before we even get to the issuance of a Loan Application and assuming that we have an interest in your transaction, PSC will issue a Letter of Interest or Term Sheet which serves as a soft quote on pricing and sizing.
Q: What are Pacific Security Captial's typical loan terms and rates?
Each transaction is priced and sized based upon the unique underwriting characteristics of the deal. One of our strongest value propositions is that we are both a direct lender and intermediary which means we have a number of different ways to fund a transaction insuring our sponsors are delivered competitive pricing. Unlike many direct lenders, mortgage bankers or mortgage brokers we have extremely flexible pricing guidelines and can usually align our pricing with reasonable sponsor requirements. We offer non-recourse long term fixed rate pricing, short term floating rate pricing or float to fixed options. We can also design our pricing over virtually any index or security including Treasuries, LIBOR, SWAPS and other index options.
Q: Does Pacific Security Capital work with Mortgage Brokers and Mortgage Bankers?
PSC offers select mortgage bankers and brokers access to capital. PSC has one of the largest correspondent and approved broker networks in the industry. However we only work with approved brokers and correspondents who have gone through a registration process with us to insure that we only see quality deal flow. To find out more about PSC's Correspondent and Approved Broker programs please view our Correspondent's Page.
Q: How long does it take for Pacific Security Capital to close a loan?
While each transaction has its own nuances that will determine the speed at which we can close, most transactions will fund within 45 - 60 days of a signed Loan Application being received by PSC. We pride ourselves on possessing superb execution capabilities. We understand all issues with regard to expeditious processing and closing and have solid quality assurance programs in place to insure that we meet all execution goals and maintain operational excellence.
Q: How do I contact a loan officer?
To insure that our borrowers receive access to subject matter experts PSC loan officers are divided into teams based upon asset classes, loan amounts, and loan types. In order to make sure that our processes are user friendly PSC maintains a full time business development staff to insure that all origination inquiries are routed to the loan officer most qualified to address your needs. Our business development staff can be accessed via our toll free number, local direct dial numbers or via e-mail. For more information please view our contact page.
For more information on PSC please see our FAQ's, underwriting matrix, fill out our online application or contact PSC directly.