Everyone wants to operate a business in New York, New York. Companies from around the world travel to the Big Apple to expand their presence in the market.
While the costs of operating a business in the City and the region may be rather expensive, the rewards can be lucrative. Nevertheless, each and every year, a number of financial institutions from around the globe decide its time to expand in the region. As the year is drawing to a close, a number of new entrants from regional and national banks are seeking to gain presence and market share in offering financing for commercial real estate.
One of the most active real estate lenders during the beginning of the 21st century was North Fork Bank. The Long Island based bank began an aggressive move into New York City in 1991 and made at least ten acquisitions over the next fifteen years. In December, 2006 Capital One Financial Corporation acquired North Fork in a transaction valued at approximately $13.2 billion.
February 1, 2013 is the date when Herald National Bank, a subsidiary of Bank United will become Bank United. Over the past few months, a number of former North Fork commercial lenders have joined the ranks of new employees at Herald National Bank. November 12th was the effective date for the first day of employment of Paul Leprohon a former employee at North Fork Bank. Mr. Leprohon joined the New York City office of the bank, joining Paul Breuer who is based in Melville, Long Island. Both individuals spent many years working together at Chase Manhattan Bank and at North Fork Bank. These individuals will be working with the chairman and vice chairman of Bank United, John Kanas and John Bohlsen, both formerly of North Fork Bank.
Banco Popular is a $37 billion holding company based in Puerto Rico. Over the past few years the bank has been rebranding in the United States shifting to a community bank. In June of this year, the bank changed the name of its New York City operation to Popular Community Bank. The bank which has been operating in New York for fifty one years was an active lender in providing construction and real estate financing. The combination of the recession and economic crisis of 2008 caused the bank to reduce its exposure in this market.
This summer, Sophia Haliotis joined as a senior vice president for the $8.7 billion asset Popular Community, the U.S. unit of Popular. She joined the bank to lead the commercial banking and real estate team's expansion in retail, industrial, multifamily apartment and nonprofit refinancing sectors.
Prior to joining Popular, she was responsible for structuring and approving JP Morgan's commercial real estate loans in the New York, New Jersey, Washington, D.C. Boston and Pennsylvania market. Since she joined the banks the bank has hired a number of seasoned real estate lenders.
"While Popular Community Bank never really exited the Commercial Real Estate Business, given the recent economic downturn like many bank, it had to direct its attention to the health of its loan portfolio", said Ms. Haliotis.
"Currently, the bank is re-focusing on growing its commercial real estate book as well as its overall commercial lending. Growth is expected to come from a new initiative in multi-family lending with competitive pricing and terms to be delivered by a team of bankers who have deep knowledge of the market and its players. We will also continue to grow our existing commercial real estate business and accommodate construction financing for select residential projects", she added.
In July of this year, Hudson City Bancorp announced that it will enter the lucrative commercial real estate market. The bank announced that it would initially participate in syndicated commercial real estate and multi-family mortgage loans. On August 27th, M & T Bank Corp, agreed to buy Hudson City Bancorp for $3.7 billion.
With the acquisition, M & T Bank one of the pre-eminent real estate lenders in metropolitan New York will expand its presence in providing commercial real estate and middle market financing to companies in markets where Hudson City has an extensive branch network, especially in the State of New Jersey, Long Island and Connecticut.
Tristate Capital Bank provides commercial and industrial banking, commercial real estate lending and private banking services for middle market businesses. The bank was founded in 2007 and is based in Pittsburgh, Pennsylvania. It has operations in Philadelphia, New Jersey, and Cleveland, Ohio. This past summer, the bank opened its New York City location at 623 Fifth Avenue. In August, the bank announced the hiring of Thomas Gilmartin, to serve as regional president of the company's New York City Market.
William Schenck III, TriState Capital Bank, President commented on the banks growth and expansion plans, "Out bank's focus is serving middle market businesses with revenues in the $20MM to $200MM range and high net worth individuals. We are in Cleveland, Pittsburgh, Philadelphia, and New Jersey and are excited about now being part of the New York metropolitan market.
Mr. Gilmartin, the bank's regional president, said "The New York team will focus mainly on middle market and commercial real estate business. Our success will come from hiring talented, committed and successful bankers with a couple of decades of experience in the market. The bank is a business bank, not having a retail platform, thus, we are able to provide the high level of personalized service that our clients deserve and expect".
Before the end of the year, People's United Bank is expected to open its flagship, New York City branch at 250 Park Avenue. In July, the bank announced that John Costa joined the bank's Commercial Banking group as Executive Vice President and head of the bank's New York commercial real estate business. Prior to joining People, Mr. Costa headed Santander Real Estate Capital, where he led both new loan origination and the management of $21 billion portfolio of real estate loans, the majority of which were secured by multi-family properties.
In the press release issued by the bank announcing the hiring of Mr. Costa, Jeffrey Tengel, Senior Executive Vice President, Commercial Banking said, "We are pleased to have John join us to grow our lending activities in the metro New York market where we have been active for years. In addition to the hiring of Mr. Costa, the bank hired two other senior lenders from Santander, specializing in multi-family financing.
"People's United has been an active participant in New York City commercial real estate finance for many years, covering the market with lenders based just outside the city proper", said John Costa. "The bank has lent consistently throughout the financial downturn. To further its commitment to the NYC market, the bank is opening a branch on Park Avenue and has opened a commercial real estate office on Third Avenue, staffed with a dozen loan officers. This team will be focused on building client relationships in the New York Market."
Minneapolis based U.S. Bancorp, with $352 billion in assts, is the parent company of U.S. Bank National Association, the 5th largest commercial bank in the United States. Of the past decade, the bank with regional offices in Boston and McLean, Virginia have provided financing for commercial real estate for private investors, real estate investment trusts and private equity funds. Earlier this year, the bank hired Gregory Fierce, a seasoned real estate lender to oversee the loan production and originations in New York City. "U.S. Bank has done several deals in the market and we have a number of well known established clients in this marketplace", said Mr. Fierce. "I joined the bank to focus more on the New York City marketplace. With that groundwork laid in 2012, we plan to expand our portfolio further in 2013".
California based First Republic Bank is expanding it's presence in the commercial real estate lending in the New York City Market. Last December, the leading private bank and wealth Management Company announced that Garrett Sokoloff joined First Republic as Managing Director in New York City. Mr. Sokoloff is an experienced real estate lender who had worked for UBS as the co-head of conduit origination in the real estate finance group. Over the past year, his team has become a major force in providing commercial real estate financing in the region.
Another California headquartered bank is Los Angeles based City National Corp, the parent company of City National Bank with total assets of $26.3 billion at September 30, 2012. The bank opened an office in New York City and added a second office in Times Square in 2011. This summer the bank, executed a 15 year lease for retail and office space of approximately 45,000 square feet at 400 Park Avenue which has served as its New York City headquarters since the company entered the market in 2002.
Industry leaders expect the bank to join the ranks of new lenders providing financing for commercial real estate. The banks Chairman and CEO, Russell Goldsmith, said, "After nearly a decade of solid growth since opening our office at 400 Park Avenue, City National today has ore than 80 colleagues, two full service offices, nearly $2 billion in loans and deposits, and a full range of business and private banking services in Manhattan. "This expanded presence at 400 Park will allow us to further grow our brand recognition, capabilities, clients and colleagues base. It is a selective and strategic expansion that reflects our continuing commitment to New York".
These banks as well as others all want to be in New York, New York. In the words of the late Frank Sinatra, "If I can make it there, I'm gonna make it anywhere: It's up to you-New York, New York.