Term Sheet: Regional banking pressure rises again; Banco Inbursa doubles down on Miami; Maverick launches seventh debt strategy

New York Community Bank earnings draw commercial real estate debt liquidity concerns but analysts downplay systemic stress; Banco Inbursa originates $445 million of construction financings in Miami; Nuveen Green Capital expands C-PACE focus with Virginia's first-ever deal and more in today’s Term Sheet, exclusively for our valued subscribers.

They said it

“You have to be able to invest and defend, but the weight will still be on defending for 2024” 

Peter Gordon, chief investment officer at Nashville-based manager AllianceBernstein, tells Real Estate Capital USA how the real estate debt industry will revolve around loan modifications and opportunistic originations this year.

What’s new

Cloudy skies: Issues with New York Community Bank’s commercial real estate portfolio brought back concerns about regional bank vitality (Source: Getty)

Grey skies

Westbury, New York-based New York Community Bank drew attention this week after increasing its allowance for credit losses to $992 million and announcing losses in its fourth quarter earnings report. While the situation underscores returning concerns around regional banks, New York-based manager Cohen & Steers in a report published this week said the situation does not signal a systemic problem in the commercial real estate debt industry or broader stress among regional banks.

Federal Reserve chair Jerome Powell weighed in as well, telling CBS’s 60 Minutes that more regional and local banks are likely to shutter, merge or consolidate because of commercial real estate weakness. “I don’t think there is much risk of a repeat of [the start of the global financial crisis in] 2008,” Powell added. “I do think it is a manageable problem.”

Cohen & Steers anticipates more banks will report commercial real estate loan losses in the quarters to come, but varying reserve adequacy across institutions – including NYCB which had to add to its reserves – will ultimately determine which regional banks face more liquidity challenges than others.

Miami twice

Mexico City-based Banco Inbursa this week doubled down on its Miami exposure with a pair of construction loans totaling $445 million that will be used to fund a multifamily and a condominium project. The larger of the two deals was a $350 million loan originated for Miami-based manager and developer Mast Capital to build Cipriani Residences Miami, an 80-story tower featuring 397 residences. The financing included a $250 million loan from Los Angeles-based manager Ascendant Capital Partners, making the $600 million package a record for the South Florida market.

The second Inbursa-backed deal was a $95 million loan for local developers Merrimac Ventures and Aria Development Group to build a 32-story condominium project in the city. The combination of the two deals – both arranged by New York-based advisory Newmark – put Inbursa just ahead of Little Rock, Arkansas-based Bank OZK for Florida construction financing on a year-to-date basis, according to data from Real Estate Capital USA’s Lending Barometer.

Powdering up

Despite a slow fundraising enviornment, new equity and debt funds continue to hit the market, with two firms this week announcing or closing vehicles. New York-based Maverick Real Estate Partners filed to launch the seventh vintage of its commercial real estate debt fund. The Maverick Lien Fund VII has a target of $500 million and its launch arrives more than two years after the close of its predecessor, the $317.6 million Maverick Lien Fund VI, per affiliate PERE‘s data.

Meanwhile, New York-based Town Lane, a first-time equity fund co-founded by Blackstone’s former head of real estate acquisitions in the Americas Tyler Henritze, this week announced it closed on $750 million in commitments for its debut offering during the first quarter of 2024. Town Lane is targeting $1 billion in capital committed by the end of June, which would make it one of the highest amounts raised for a first-time property fund.

Trending

Virginia is for C-PACE

Darien, Connecticut-based manager Nuveen Green Capital this week closed Virginia’s first commercial property-assessed clean energy financing deal, expanding the sustainable financing program’s reach further across the US. The Nuveen affiliate worked alongside Virginia PACE Authority and Prince William County to help finance the English Meadows Manassas campus, a recently constructed senior housing assisting living and memory care facility. While small compared with the heights some recent C-PACE financings have reached, the $8.7 million C-PACE financing provided to Manassas, Virginia-based developer Aksoylu Properties serves as more confirmation the green-lending tool has room to grow across the US. Nuveen Green Capital’s funding will be used for the lighting, building envelope, HVAC, plumbing and roofing upgrades for the 88-unit, 105-bed facility.

Triple ripple

The commercial mortgage-backed securities market is seeing a strong start to the year, with private-label CMBS and commercial real estate collateralized loan obligations totaling $6.8 billion year to date – triple the volume seen during the same period in 2023. Issuance this week included a pair of five-year conduit deals, the $693 million BBCMS 2024-C24 and the $519 million BANK5 2024-5YR5, according to a report from New York-based trade association Commercial Real Estate Finance Council. Meanwhile, a $1.1 billion commercial real estate CLO transaction, backed by predominantly multifamily properties, also hit the market.

Data snapshot

Feeling low

Affiliate PERE this week published its fundraising report for 2023 [subscription required], which showed the private real estate market raised its lowest amount of aggregate capital since 2012. During 2023, $138.8 billion of capital was raised for real estate funds. Of that, 18 percent – an estimated $24.9 billion – was committed to debt-focused vehicles specifically.

People

Nuveen Green Capital brings on origination chief

Darien, Connecticut-based Nuveen Green Capital this week hired Christopher Lawton as head of originations. The hire is part of a push to scale the firm’s commercial property assessed clean energy financing and sustainable lending platform. In August 2023, the firm launched the Nuveen C-PACE Lending Fund with $525 million of capital commitments from six major insurance firms. Lawton spent the past eight years at Bank OZK, closing more than $8 billion of construction and bridge facilities. Per his LinkedIn profile, his prior experience includes senior roles at Frankfurt-based DekaBank and Munich-based manager Hypo Real Estate Capital.

Loan in focus

Deuces wild: Athene originated a $146 million refinancing package for Two Sutton Place North (Source: Getty)

Housing on Lenox Hill

Des Moines, Iowa-based insurer Athene Annuity and Life this week originated a $146 million loan for New York-based real estate investment trust RXR Realty and developer GO Partners to refinance debt on Two Sutton Place North in Manhattan’s Lenox Hill neighborhood. The financing provided by the affiliate of New York-based private equity giant Apollo Global Management will be used to recapitalize the asset following RXR and GO’s acquisition of the residential tower in November 2022.

The 37-story, 203-unit luxury multifamily tower was originally developed by the late Sheldon Solow and completed in 2014. The tower includes amenities such as a swimming pool, gym and playroom, and borders New York’s East River near Roosevelt Island and the Queensboro Bridge.


Today’s Term Sheet was prepared by Randy Plavajka with Samantha Rowan and Shihao Feng contributing