Once you know a lender's strike zone, getting the deal done with the best rate and terms requires a deal champion.
“There’s levels to this!”
If you’ve never heard this saying, it’s usually used when someone is trying to sarcastically describe how complicated a situation is.
Commercial Real Estate can be quite complicated, but lucky for you, I love simplifying things.
In my previous blog titled “How to Negotiate with Commercial Real Estate Lenders? Know Their Motivations.”, I described the different types of lenders that are suitable for different types of deals. Level 1 is having a good understanding of what each category of lenders looks for.
We can characterize Level 2 as having a professional network with multiple lending companies that specialize in each of the 8 lending buckets: CMBS, agencies, SBA, life companies, banks, credit unions, debt funds, and private capital. The extent and depth to these relationships is where a capital advisor can come in very handy.
Level 3, to me, would be having the right “deal champion” within the walls of each lending company.
What is a deal champion? How do you find a good one?
You’ve come to the right spot.
A deal champion is a term for a person that works for the lender and is responsible for receiving your deal, and pitching it to their credit committee. They’ll need to collect the right information on the way and prepare the story that the credit committee needs to hear.
Professionally, they may go by many different titles. Here is a sample list of common ones:
Keep in mind that just because two people work at the same lending shop, that does not mean they will treat your deal the same or achieve the same outcome.
Relationships and experience make a BIG difference.
Assuming that you find a lending shop that you trust, the next step is finding a deal champion that works for that lender.
To find a high quality deal champion, you’re going to need to ask more questions:
Some of the questions above reveal the deal champion’s internal clout with their lending institution. Some of them speak to the strength of the borrower’s connection with the deal champion. Both are critical to the success of getting a difficult deal across the line. If a deal champion has just enough credibility to sell a hard deal to the credit committee, it’s going to take a strong connection to get them to risk that credibility for you, rather than spending it on another deal or borrower.