Analysis of three NYC high-volume lenders

By Adam Pincus

The city’s real estate owners and lenders are undertaking an evolving reassessment of the value of their holdings. The delicate interaction includes refinancing buildings. A refinancing is of course based on the value of the building, and the value is tied to the property’s net income.

The new rent regulations are expected to reduce anticipated net income growth in the coming years.

While the city’s public records don’t provide consistent information on specific deals, a look all the activity for a specific lender for a month begins to tell a story.

PincusCo analyzed all the loans of $5 million and up, financed or refinanced by the city’s high-volume commercial banks — JPMorgan Chase, Signature Bank and New York Community Bank. High-volume was defined as a bank with more than 40 loans across December and January.

PincusCo did not submit this data to the banks for vetting, so there is no representation that the banks have reviewed or confirmed this information.

JPMorgan Chase Bank

JPMorgan Chase was the lender on 37 loans totaling $531 million. The vast majority of those loans are multifamily in the Bronx and Manhattan. One borrower, Matthew Schmelzer’s Tryax Realty Management, accounted for the bulk of the rental building activity, or 17 loans refinanced for $158.7 million. That was an increase of 10 percent over the prior debt Tryax had been provided on those same properties.

JPMorgan’s top loan, at $185 million, went to Gary Barnett’s Extell Development, but it was not a new loan, it was rather another release of funds that was part of the $900 million loan signed in 2017. JPMorgan leads a group providing the debt. Another JPMorgan loan was a construction loan and another a land loan.

JPMorgan Chase was the prior lender on 35 loans, totaling $288.8 million, and it retained 28 of them, or 80 percent.

For the 32 loans that JPMorgan refinanced, it increased the debt level an average of 7 percent. The prior lender for 27 of those loans was Chase.

New York Community Bank

In January, the firm recorded 26 loans totaling $410 million, all were for buildings or portfolios that included cash flowing, multifamily properties with more than 10 units, and most under 100 units.

New York Community was a party to 27 loans which were refinanced and recorded in January valued at $329.6 million. (There was an additional loan that involved other lenders and was excluded from this analysis) and of those, this bank remained the lender on 20.

The firms that stuck with the bank included Stellar Management, Croman Real Estate, Pinnacle Group and Urban American Management.

On the other side of the coin, New York Community picked up eight new loans, all for multifamily buildings. Seven of those were refinance loans and one was an acquisition loan.

Of the 20 that the bank had and refinanced, it raised the total loan amount by 8.5 percent to $264.8 million.

The increase is an imprecise statistic, because the in-place loan might be a year old or from 2014 or earlier.

The eight the firm gave up to other lenders saw a 20 percent increase in loan amount, but much of that was driven by one loan, which Citigroup provided on four buildings LeFrak owns in LeFrak City, Queens. There, Citigroup nearly doubled the existing debt, rising from $15.8 million to $30 million.

Signature Bank

Signature Bank lent on a slightly more diverse portfolio than New York Community and Chase. Signature provided loans for 25 properties, for a total of $318 million. Of those, 18 were for multifamily buildings, but others were for office buildings, retail buildings and one lodging property, the Bentley Hotel.

In another contrast to Chase and New York Community, Signature saw a much higher churn last month. Of the 23 loans it held that saw the loan refinanced or the properties sold, it retained only eight, or 35 percent. To keep its loan volume up, it took over loans from a range of lenders, including Capital One, People’s United Bank, First Republic 10 other lenders.

In contrast, only about a third of New York Community Bank’s January loans were new to the firm. And only 20 percent of JPMorgan Chase loans were new.

In addition, Signature on average increased the debt on a refinancing by a larger percent than Chase or New York Community. For those 21 loans, the average increase was 15 percent.