Real Estate Revolution: Where Simplicity Becomes Substantial - Lenders
Proximity Park - Charlotte, NC
The Tempus approach to commercial real estate also encompasses lenders, another, sometimes overlooked, participant in the real estate investment community. As with other groups discussed previously, Tempus takes a unique approach to its relationship with lenders, recognizing them as a foundational part of the ecosystem. This difference goes beyond platitudes and cordial interactions to a relationship that functions as a true partnership.
Lenders are sellers of money, which by its very nature is fungible. In other words, a dollar received from one party is as good as a dollar from any other party. The traditional view says that if all dollars are the same then the way to maximize value is to access dollars at the lowest overall cost. If money is the nutrient that real estate investments require, the lenders are the soil that provides it. Tempus recognizes the critical role lenders play in the value creation process and approaches them in a manner that shows they are truly valued.
How Tempus Benefits Lenders
Lenders operate on extremely thin margins with the spread between their wholesale cost and retail price a mere fraction of those in other industries. In addition, lenders face a high degree of regulation, limiting their ability to lend in certain ways. Tempus understands these dynamics and has crafted an approach to lenders that seeks to bring more value to them than typical borrowers.
First, Tempus understands the profitability constraints lenders face and chooses to negotiate market-based terms rather than aggressively bidding each loan, thus preserving a fair level of profitability for the lender. Additionally, Tempus assembles the capital structure for each investment so that the loan receives high marks in the regulatory risk analysis. Beyond these factors, Tempus maintains open and transparent dialogue with our lenders, fostering a true relationship that goes well beyond a periodic status update. With a commitment to deliver these value drivers to lenders, Tempus can deliver a consistently profitable relationship to them with many benefits to the ecosystem in return.
How Lenders Benefit Tempus
When conditions are optimal, a garden can grow in a wide variety of soil, but in challenging environments, only well-tended soil will do. When she penned the words, "You don't know what you've got ‘til it's gone", Joni Mitchell was talking about the beauty of nature, but she could just as easily have been talking about financing. Lenders are often anxious to make new loans and opportunities abound to borrow funds, but other times, finding a loan is difficult, if not impossible. It's no coincidence that these circumstances happen to be the same moments when some of the most attractive investment opportunities surface. Whether it is a situation that requires unusually quick action, or an opportunity amid broader economic turmoil, these moments offer tremendous value for those able to act. Because of Tempus' commitment to a mutually beneficial relationship with lenders over time, they can access the financing necessary to seize these opportunities even in the most challenging markets. The ability to execute in these moments reinforces the Tempus network, not only with investors who find a great deal, but also with others such as brokers and sellers who find Tempus’ ability to execute in these environments truly valuable.
Next week, we will focus on buyers and show you how we weather the relationships we have with them. They are sometimes neglected during the process, but the Tempus difference aims to ensure buyers are always valued.
Dan Andrews
CEO and Managing Partner