A10 Capital, a Boise-based commercial real estate lender, has hired Anuj Gupta from Ready Capital as its new CEO.
Gupta, who was the president of Ready Capital, told Real Estate Capital USA that he sees the potential to expand A10’s senior secured bridge and permanent loan business across the US over the next two or three years.
The vertically integrated manager has an in-house servicing team and other infrastructure which will allow it to grow at a time when more institutional investors are looking at debt strategies and more sponsors are looking to secure new loans or refinance existing debt, Gupta said.
The firm’s growth plans mesh with Gupta’s broader experience. In addition to Ready Capital, Gupta also filled senior roles at GE Capital which included leading GE Real Estate’s commercial mortgage-backed securities team and co-leading a $5 billion joint venture with the US Department of Treasury to invest in CMBS and residential mortgage-backed securities.
“The idea is to leverage my background, which is more strategic and in addition to growing originations includes involvement with M&A, loan acquisitions and capital raising, and help to take the existing platform and grow it in the future,” Gupta said. “At A10Capital, we use our balance sheet, but we also originate loans for separate accounts, which we see as one area of potential growth. We also could grow through strategic relationships.”
Gupta also sees the potential for growing the firm’s agency lending business, potentially via targeted licensed programs that allows lenders to originate loans and securitize with agency support. A10 did participate as an authorized seller/servicer in a Freddie Mac Affordable SFR pilot program in the past.
“I am looking to distill all of these things to create a three-year plan to get us on the path to growth,” Gupta added. “Our goal is to find our niche, do the business we want to do and grow at a measured pace with a focus on higher quality product. We could double or triple our originations over the next couple of years and possibly expand our products to include something like a core bridge loan product or our own flagship fixed-rate product.”
Despite the current market turmoil, Gupta believes there is a strong path to growth for A10 Capital.
“We have had a lot of pricing discipline here and we didn’t get caught by the sudden rise in rates,” Gupta said. “The nice thing is that we can really play offense for the most part. The message is that we are going to lend, we have capital, and we are in the market. In environments like today, the playbook says you can go up in pricing and down in leverage and that is the play for us right now.”
By sector, the firm focuses on all of the core property types, with substantial interest in affordable housing. It also likes what it sees in the self-storage sector and even sees some sparks in office. “We are seeing some leasing momentum in office, and we believe we can be a good lender there at a time when there is not a lot of competition,” Gupta continued. “Some people are in, some people are out, and we see a chance to pick up high-quality product.”
As the firm expands its business, Gupta believes its in-house servicing business will be a key differentiator.
“While it can be efficient to outsource to third-party servicers, you do have to have a layer of people who are the liaison between the borrower and the servicer and that leads to some extra cost at the end of the day,” Gupta said. “We are also finding borrowers can be unhappy with traditional CMBS servicing practices on more complex bridge loans. We are a rated servicer and, even when we securitize loans, we are able to assure borrowers who are nervous about securitization that we are not going to hand off loans and we will be with them through the term.”
There’s another factor around in-house servicing. “It can be a pretty good source of income, when you look at how much we have in escrows. With rates going up, you’re suddenly seeing a very meaningful number,” he added.