As the real estate arm of John Hancock, the Real Estate Finance Group (REFG) provides mortgage financing for commercial properties. Their lending activity spans a wide array of property types, with loans currently outstanding in over 40 states and 125 metropolitan areas.
PSRS and John Hancocks correspondent relationship has its roots in the late 1950s. PSRS ability to go directly to Corporate Headquarters to receive immediate responses from Hancocks decision makers has generated billions of dollars in loans, which PSRS services.
We sat down with a loan officer in the corporate office to discuss John Hancocks platform:
What are the product types Hancock is focusing on?
In general, we like to focus on the core four: Retail, Office, Industrial and Multifamily. We do have a small appetite for hotel, parking garages and manufactured homes. In California specifically, while appetite for core real estate remains strong across the board, we are especially on the lookout for industrial product. We would also like to see strong urban office product and multifamily. Good core real estate is the key.
What is your appetite relative to California for the rest of the year?
We like core proven markets in general. We do a lot of business in Los Angeles and Orange County. While we plan to continue that trend we plan to see more activity from San Diego and the Bay Area.
Are you having any issues with allocation?
At this stage, we are being more selective with retail.
What sets PSRS apart from its competition and what do we do well?
You know Hancocks program well and PSRSs ability to explain the merits to clients has created ample opportunities for repeat business with clients.
What kind of spreads are you providing?
Our spreads are around 200 (over the 10-Year T for fuller (65% + LTV) deals) and as low as 140 over for more conservative deals.
Where are you winning deals?
On the whole, we are winning longer-term deals. We are currently closing a lot of 20, 25 and 30-year term deals. Those deals are typically a little lower on leverage. On the high leverage product, we are less competitive on proceeds. We prefer stabilized assets versus acquisitions.
Being able to offer full term I.O. on sub 60% LTV and up to five years of I.O. on anything above 60% LTV has been helpful. Also, being able to top-off loans (provide additional funds throughout the life of the loan against pent-up equity) is always a winner.