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Parkview sees investor interest rise in construction lending niche

The Los Angeles debt fund manager sees its construction and development background as crucial to its success as a lender.

Parkview Financial, a Los Angeles-based commercial real estate construction lender, is gearing up to expand its investor base as more investors tilt toward debt strategies.

The company has a unique focus – originating constructions, primarily on multifamily properties throughout the US. It also has a unique background: before Parkview became a real estate debt fund with more than $3 billion of capital deployed, it was a developer and contractor.

This hands-on experience gives them a leg up on more finance-centric lenders, according to Parkview founder and CEO Paul Rahimian.

“A lot of [lenders] are finance guys, bank guys – they understand numbers. We felt like we have something different because we have a construction background. And it really helps when we’re lending because we understand the pain of the borrower,” Rahimian told Real Estate Capital USA.

After decades of doing its own development, Parkview saw a gap in construction financing emerge after the 2008 Global Financial Crisis. Equipped with capital and developmental expertise, Parkview began transitioning into a full-time construction lender in 2009. “It was really a natural progression,” Rahimian added.

In 2015, Parkview began lining up outside investors. “We’ve grown our platform and our yield to our investors has been constant. We’ve kept defaults low. We’ve never had a loss and that’s gotten the institutional money, including endowment funds, interested,” Rahimian said.

“You’re not just looking at a bunch of wood and nails and concrete”

Rahimian sees Parkview’s debt investments as construction partnerships in which the firm gets closely involved in all stages of development.

“You’re not just looking at a bunch of wood and nails and concrete. You’re understanding the process of doing things the right way or the wrong way. And again, it’s not just about helping our investors, which obviously is our focus, but helping our borrowers too. Because if they hit an issue or an obstacle, they know they can come to us and we can talk them through and figure out the solution,” Rahimian said.

2022 Outlook

Last year was a banner year for Parkview despite the pandemic dragging on. After originating $600 million in loans in 2020, Rahimian and his team set a goal of $800 million for 2021 – and finished the year with $1.2 billion deployed. The rapid growth has spurred Parkview to expand operations and open offices in multiple markets beyond its Los Angeles base.

Despite continued uncertainty around COVID-19 as well as inflation and interest rate hikes, Rahimian does not see Parkview slowing down in 2022.

“With covid, a lot of our colleagues in the space retreated. Either they didn’t want to lend, or they wanted to lend with different parameters and a lot of leverage. They did different things where we really did the opposite. We jumped back in really quickly,” Rahimian said. “We’re not going to make an excuse, whether it’s a demographic or location or a pandemic, to not close a loan.”

 

 

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