As we enter 2011, a new entrant to the financing of commercial real estate is local credit unions. New York State is home to 490 credit unions with 4.4 million members and $50 billion in assets. Some of the largest in asset size and membership have been active players in the financing of business and commercial real estate loans.
A private developer built Brooklyn College’s first student dormitory this past August and this month, the developer closed on the refinancing of the construction loan with a $16 million mortgage secured from Bethpage Federal Credit Union.
Bethpage originally opened its doors as a credit union for employees of Northrop Grumman global security company in 1941. Today, Bethpage is the largest credit union based on assets in Long Island and the 23rd largest credit union in the country.
An individual can become a member of Bethpage if he lives, works, worships or attends school in Nassau or Suffolk county, (with the exception of townships of East Hampton, Southampton and Shelter Island).
Another active credit union providing financing for commercial real estate is Progressive Credit Union, which has $600 million in assets. Last summer, the credit union provided an acquisition loan to FIP Ventures for its $17 million acquisition of the vast majority of the commercial property in Long Island’s Fire Island Pines area on Fire Island.
Progressive helped with the financing of the Brooklyn College dormitory as well as the construction of A Condominium On Park Avenue in Manhattan and a number of gasoline stations and diners in the tri-state region.
Melrose Credit Union, with $1.2 billion in assets, has an open New York State charter, so regardless of where you live or how you earn a living, you may qualify for membership. There are no geographic restrictions or group affiliation requirements. The Queens-based credit union has been an active lending for commercial real estate. As it is noted on its corporate website, Melrose is interested in providing mortgage financing for office building and other business facilities.
“More and more credit unions are entertaining member business loans primarily secured by commercial real estate, either directly or through loan participation,” said Robert Familant, treasurer and CEO of Progressive Credit Union. With the resurgence of the values of commercial real estate in tri-state region, expect this trend to continue in 2011.
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.