{"id":1004069541,"date":"2013-03-27T11:25:33","date_gmt":"2013-03-27T19:25:33","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004069541"},"modified":"2022-12-07T17:47:40","modified_gmt":"2022-12-08T01:47:40","slug":"another-country","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/another-country\/","title":{"rendered":"Another Country"},"content":{"rendered":"

Foreign Banks Ramp Up in U.S., Competing Aggressively Against Domestic Counterparts<\/strong><\/p>\n

By Keat Foong , Finance Editor<\/em><\/p>\n

\"\"<\/a><\/p>\n

Foreign banks are back in the market for U.S. loans. Together with resurgent domestic banks, they are actively vying for permanent, acquisition and takeout financing, and they are ramping up in the construction financing sector, as well. Canadian, European and Chinese banks are mostly targeting the best apartment and office transactions in major gateway cities, but they are often willing to offer very competitive loan terms on the most desirable deals in an attempt to outcompete domestic banks.<\/p>\n

One large, high-profile transaction in the past year was Bank of China\u2019s $775 million refinancing of SL Green Realty Corp.\u2019s 1515 Broadway office high-rise in Times Square in New York City. Brokered by Holliday Fenoglio Fowler L.P., the seven-year mortgage refinanced a $447 million existing loan on the property, The Commercial Observer reported. Bank of China has made other loans to SL Green, including ones for 600 Lexington Ave. and 3 Columbus Circle, according to the publication.<\/p>\n

The loan illustrates foreign banks\u2019 appetite for Class A\u2014including trophy\u2014commercial properties in major markets, especially New York. If anything, the trend became more pronounced in the second half of 2012, according to Edward Mermelstein, principal of Rheem, Bell and Mermelstein L.L.P., which provides advisory services for foreign clients. \u201cThe market in the past several months has changed. Lenders\u2014both local and foreign\u2014have loosened their purse strings,\u201d he said.<\/p>\n

Larger properties in bigger cities are easier for the overseas institutions to underwrite and understand, according to William Collins, vice chairman & principal of Cassidy Turley. \u201cForeign banks are consistently in the market in big cities,\u201d said Collins, estimating that they represent about 25 percent of the market at any time under these circumstances. Because of their ability to advance large chunks of money, these institutions also prefer big-size transactions as candidates for financing. Preferred cities are major metropolitan areas and\/or the downtowns of New York, Washington, D.C., San Francisco, Los Angeles and Boston. And \u201cwe are still talking about the top (developers and\/or investors) in the industry\u2014those that had weathered the storm in the past few years,\u201d added Mermelstein.\u00a0<\/span><\/p>\n

According to Riaz Cassum, senior managing director at HFF, those foreign institutions \u201cwill beat out domestic banks for the right kinds of deals. These loans can be quite competitive from an interest-rate perspective.\u201d As to LTV, the overseas banks\u2019 sweet spot tends to be lower-leverage transactions of 50 to 60 percent, added Collins. But they \u201care capable of underwriting higher LTV, whereas domestic banks tend to have their feet more on the ground,\u201d Collins added, and they can be more aggressive. In fact, they have to be in order to compete with U.S. banks on their home turf, according to Mermelstein.<\/p>\n

The overseas banks prefer takeout, acquisition or refinancing loans (to top developers), but they are also becoming markedly more interested in providing construction financing, said Mermelstein. \u201cPreviously, there was not a lot of responsiveness from European banks on construction financing, but today, we are having productive conversations leading to offer sheets on acquisition and construction financing,\u201d he said. Banks see \u201cthere is going to be money made on the development side,\u201d he observed. In addition, hard money rates and terms no longer apply. \u201cNow the rates are more comparable to typical lending rates.\u201d<\/p>\n

They also want to lend to the apartment market. And they are more comfortable lending now that they are observing the cost of land increase, especially in markets such as New York. \u201cThat gives them a comfort level that the collateral has strong underpinnings,\u201d Mermelstein added.<\/p>\n

Foreign Invasion<\/strong>
\nCanadian banks, which multi-family borrowers are said to have approached for construction loans during the credit crisis, rank among the foreign banks that are the most interested in the U.S. market. The likes of RBC, CIBC and TD Bank are \u201cvery, very active\u201d in the U.S. real estate market, and are \u201ca very competitive source of funds,\u201d said Collins. CIBC and RBC have expanded their U.S. lending platforms over the past three to four years and have now stepped up their lending, added Cassum.<\/p>\n

Cassidy Turley has executed multiple deals this year with the Canada-based CIBC in downtown Washington, D.C., and Crystal City in Arlington, Va. \u201cThey are doing Class A office deals in core markets,\u201d said Paul Spellman III, vice president at Cassidy Turley. The investment advisory company also brokered the financing of an Alexandria, Va., industrial-to-multi-family conversion transaction with Sovereign Bank, Spellman said. (The company declined to disclose the amounts and terms of the financings because of confidentiality agreements.)<\/p>\n

On the other hand, European lending institutions, and in particular the once-aggressive German banks, have backed off due to credit troubles in Europe. Deutsche Bank and DekaBank remain active but have reduced their involvement, observed Collins. Heleba is today more conservative, added Cassum. \u201cGerman banks are a much smaller presence compared to four to five years ago. Some have left the market, and some no longer exist (such as WestImmo),\u201d said Cassum.<\/p>\n

On the British front, Bank of Scotland and Barclays have also reduced involvement in the market, said Cassum. The Australian banks, other than the Sydney-headquartered Macquarie Bank, are not active, though they may be starting to perform more lending, he said.<\/p>\n

There are a number of other European banks that remain very interested in the market, however. Sovereign Bank, which is now owned by Spain\u2019s Santander Group, is said to be very involved, especially in New York, as well as the British-based HSBC. \u201cSovereign Bank is one of the most aggressive in New York, much more so than most other lenders,\u201d observed Mermelstein. His company closed more than $350 million in transactions in 2012, most of it in New York City and a large portion with Sovereign Bank. That institution even beats a domestic bank, Chase Bank, which is the next most aggressive in pricing, he reported.<\/p>\n

Not surprisingly, the big new kid on the block among foreign banks are those from China. In addition to Bank of China, the Industrial Bank of China is becoming more prominent, according to Cassum, and these banks may be far from exhausting their appetites. \u201cExpect Chinese banks to continue to become more active,\u201d predicted Cassum. Indeed, Jones Lang LaSalle noted in a press release that \u201cChinese (Hong Kong) banks remained the most competitive capital source\u201d among foreign bank funders of trophy properties and institutional-quality sponsors in the fourth quarter of 2012. Singaporean banks are also said to register strong activity.<\/p>\n

Looking forward, foreign banks are encouraged by the improved commercial property market in the United States. \u201cThe sentiment has definitely shifted in the past several months. The numbers are going in the right direction,\u201d reported Mermelstein. The foreign banks are not yet feeling pressured to resort to lending in secondary markets, since a lot of opportunities remain in the top markets, Mermelstein noted. But he predicted that, just as they are starting to offer more construction loans, they will also start to move to the secondary markets after at least the next six months as the financing market becomes more competitive.<\/p>\n","protected":false},"excerpt":{"rendered":"

Foreign banks ramp up in U.S., competing aggressively against domestic counterparts.<\/p>\n","protected":false},"author":952,"featured_media":1004069543,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004069541","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nAnother Country - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/another-country\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Another Country\" \/>\n<meta property=\"og:description\" content=\"Foreign banks ramp up in U.S., competing aggressively against domestic counterparts.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/another-country\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2013-03-27T19:25:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T01:47:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/03\/iStock_000023024710Medium.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"534\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Anna Spiewak\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/\"},\"author\":{\"name\":\"Anna Spiewak\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/1bbb99675c2609ea2e6792f8b25d7b76\"},\"headline\":\"Another Country\",\"datePublished\":\"2013-03-27T19:25:33+00:00\",\"dateModified\":\"2022-12-08T01:47:40+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/\"},\"wordCount\":1192,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2013\\\/03\\\/iStock_000023024710Medium.jpg\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/\",\"name\":\"Another Country - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2013\\\/03\\\/iStock_000023024710Medium.jpg\",\"datePublished\":\"2013-03-27T19:25:33+00:00\",\"dateModified\":\"2022-12-08T01:47:40+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/1bbb99675c2609ea2e6792f8b25d7b76\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/#primaryimage\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2013\\\/03\\\/iStock_000023024710Medium.jpg\",\"contentUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2013\\\/03\\\/iStock_000023024710Medium.jpg\",\"width\":\"534\",\"height\":\"800\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/another-country\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Another Country\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#website\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/1bbb99675c2609ea2e6792f8b25d7b76\",\"name\":\"Anna Spiewak\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/ca81c045f3cbec45b685f13082ecf7d9870a1909fe3ec2d4d15b1dea4897f406?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/ca81c045f3cbec45b685f13082ecf7d9870a1909fe3ec2d4d15b1dea4897f406?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/ca81c045f3cbec45b685f13082ecf7d9870a1909fe3ec2d4d15b1dea4897f406?s=96&d=mm&r=g\",\"caption\":\"Anna Spiewak\"},\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/author\\\/annaspiewak\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Another Country - Commercial Property Executive","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/another-country\/","og_locale":"en_US","og_type":"article","og_title":"Another Country","og_description":"Foreign banks ramp up in U.S., competing aggressively against domestic counterparts.","og_url":"https:\/\/www.commercialsearch.com\/news\/another-country\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2013-03-27T19:25:33+00:00","article_modified_time":"2022-12-08T01:47:40+00:00","og_image":[{"width":534,"height":800,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/03\/iStock_000023024710Medium.jpg","type":"image\/jpeg"}],"author":"Anna Spiewak","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/#article","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/"},"author":{"name":"Anna Spiewak","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/1bbb99675c2609ea2e6792f8b25d7b76"},"headline":"Another Country","datePublished":"2013-03-27T19:25:33+00:00","dateModified":"2022-12-08T01:47:40+00:00","mainEntityOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/"},"wordCount":1192,"commentCount":0,"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/03\/iStock_000023024710Medium.jpg","inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.commercialsearch.com\/news\/another-country\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/","url":"https:\/\/www.commercialsearch.com\/news\/another-country\/","name":"Another Country - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/03\/iStock_000023024710Medium.jpg","datePublished":"2013-03-27T19:25:33+00:00","dateModified":"2022-12-08T01:47:40+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/1bbb99675c2609ea2e6792f8b25d7b76"},"breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/another-country\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/03\/iStock_000023024710Medium.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/03\/iStock_000023024710Medium.jpg","width":"534","height":"800"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/another-country\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"Another Country"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/1bbb99675c2609ea2e6792f8b25d7b76","name":"Anna Spiewak","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/ca81c045f3cbec45b685f13082ecf7d9870a1909fe3ec2d4d15b1dea4897f406?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/ca81c045f3cbec45b685f13082ecf7d9870a1909fe3ec2d4d15b1dea4897f406?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/ca81c045f3cbec45b685f13082ecf7d9870a1909fe3ec2d4d15b1dea4897f406?s=96&d=mm&r=g","caption":"Anna Spiewak"},"url":"https:\/\/www.commercialsearch.com\/news\/author\/annaspiewak\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/03\/iStock_000023024710Medium.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004069541","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/952"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004069541"}],"version-history":[{"count":1,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004069541\/revisions"}],"predecessor-version":[{"id":1004625118,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004069541\/revisions\/1004625118"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004069543"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004069541"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004069541"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004069541"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}