NJ banks, credit unions active players in real estate financing

It’s a month into 2010 and a couple of New Jersey savings banks and local credit unions are helping real estate investors in the New York metro area secure much needed financing for commercial real estate.

Robert Familant, CEO and treasurer of Progressive Credit Union, which has assets of over $500 million, said that credit unions are increasingly venturing into the business loan market, primarily secured by real property. In 2009, Progressive participated in financing the first dormitory for a private developer less than two blocks from the Brooklyn College; the construction of A Condominium On Park Avenue in Manhattan and a number of Brooklyn gasoline stations.

New York state credit unions are active and willing to provide financing, yet they are limited to the amount of financing they can provide due to government regulations. Lobbyists for credit unions are pressing Washington to lift the lending cap for commercial business. Credit unions now can only lend 12.5 percent of their assets to businesses. They are lobbying Congress to lift the cap to 25 percent of assets.

Short Hills, NJ-based Investors Savings Bank is now providing lending for commercial real estate in the tri-state region. The bank, in business since 1926, has over $8.0 billion in assets and a network of over 58 branches in the Garden State.

Domenick Cama, senior executive vice president and COO of Investors Savings Bank, said, “we are very interested in providing mortgage financing in the tri-state region. To show our strong desire, we opened a loan production office in The Lincoln Building On 42nd Street across from Grand Central. We have staffed the office with a team of four seasoned bankers and are seeking to provide mortgage financing especially for rent regulated multi-family apartments in New York City and New Jersey.”

In December, the bank gave a $44 million, seven-year, fixed-rate loan for a portfolio of five office and industrial buildings in New York, New Jersey and Connecticut. The portfolio spans 836,463 square feet, with an 88 percent occupancy rate. Tenants include PerkinElmer, Xerox and New York State agencies.

Earlier in the year, Investors Savings provided a $29 million loan secured by a mixed-use property comprised of 213 residential apartments and 22 retail locations in Fort Lee, NJ. The five-year, non-recourse loan had a floating rate of 4.5 percent with a 30-year amortization.

On the site of the former Times Square Store is a retail strip shopping center now known as Hempstead Village Commons (at one time this was a major retail shopping region in Long Island). The 96,482-square-foot center’s tenants include Pep Boys, AJ Wright, Staples, Rite Aid and Hollywood Videos, and it will contain 465 parking spaces. Last month, a local credit union provided a $10.6 million loan.

Member Credit Unions have been active in providing loans for commercial real estate. One of the most active local credit unions is Bethpage Federal Credit Union, a full-service financial institution headquartered in Bethpage, LI with assets over $3 billion. As reported in Long Island Business News, Bethpage has doubled its staff in its commercial division.

Bethpage is active in providing financing for all property types. The credit union provides loans for up to 10 years with 30-year amortization. Loans range from $1 million to $30 million, with a sweet spot of $4 million. Loans are only made to businesses or individuals who live, work, worship or attend school in Nassau and Suffolk counties.

In addition to Bethpage Federal Credit Union, Melrose and Sperry are providing financing for commercial real estate.

Michael Stoler is a columnist for The Real Deal and host of real estate programs “The Stoler Report” and “Building New York” on CUNY TV and on WEGTV in East Hampton. His radio show, “The Michael Stoler Real Estate Report,” airs on 1010 WINS on Saturdays and Sundays. Stoler is a director at Madison Realty Capital as well as an adjunct professor at NYU Real Estate Institute, and a former contributing editor and columnist for the New York Sun.