As many lenders depart the smaller loan space, the new initiative helps borrowers needing $2 to $5 million
TIAA Bank commercial real estate (CRE) team unveiled a program to accelerate small-balance loans of $2 to $5 million. The program targets brokers needing help with properties, such as multifamily, retail, self-storage, student housing and small-cap industrial.
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“Loans for unanchored strip retail should not be subject to the same process as deals for metro office towers,” said Ellen Comeaux, TIAA Bank’s Senior Vice President and Commercial Division Leader.
“We’ve always handled small balance loans differently than larger transactions, but now we’ll have a dedicated team to streamline the underwriting, shorten the checklists and reduce the need to negotiate documents,” Comeaux said. “This will be faster and simpler for all parties, and it could save borrowers weeks of time and thousands of dollars.”
The announcement comes as many lenders have moved out of the smaller loan space, instead focusing on larger loans to meet aggressive capital deployment targets. TIAA Bank’s program will provide a programmatic, customized approach from origination through closing that includes:
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- A scoring model on the origination side that limits due diligence items for approval. Borrowers could now receive approval in as little as two days, not two weeks.
- Standardized, in-house loan documents that are borrower-friendly and could eliminate the need for outside legal counsel. That could save borrowers more than $20,000.
- Shorter borrower questionnaires and streamlined environmental forms.
- An increased use of limited property inspections rather than property condition assessments (PCAs) that take longer and often cost about $3,000
- A reduced need to collect estoppels and Subordination, Non-Disturbance and Attornment Agreements (SNDAs).
“Our goal,” Comeaux said, “is to get borrowers to the closing within 45 to 60 days.”
TIAA Bank has seen an uptick in demand for several of these types of properties. During the first quarter of 2022, for example, a third of the deals were for small-balance, multi-family housing, almost a quarter were for small-balance retail and more than 10% were for small-balance self-storage.
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