The sudden departure of a key real estate executive at Bank of the Ozarks is fueling speculation about the lender’s appetite for New York City development projects.
Dan Thomas, head of the real estate lending group, abruptly resigned July 28, setting off concerns about whether the Arkansas-based community bank would continue to be a go-to source of construction financing.
Immediately after his departure, the bank’s stock plunged 12 percent, though it has since bounced back. A spokesperson for the lender said it is “business as usual” within the real estate lending group.
But not everyone shared her confidence. “Dan was the guy, the face of the company,” one source told Crain’s. Over Thomas’ 14-year tenure, commercial real estate lending became the bank’s largest source of revenue.
Ozarks has become one of the most active construction lenders in New York, financing projects for Extell Development, the Chetrit Group and Xinyuan Real Estate, among others.
In September, Ozarks agreed to give Chetrit a $170 million construction for a 300-room hotel and retail project at 255 West 34th Street. The bank is also lending Cape Advisors $52 million for a boutique Tribeca condo at 65 West Broadway.
Although some have been criticized Ozarks for having a large concentration of commercial real estate loans, analysts say the bank is on solid footing. CEO George Gleason said the bank takes a conservative approach to lending, which is why it has been able to step up at a time when many traditional banks are not lending.
For example, the bank requires a large down payment, which must be paid back if a project flops. One developer told Crain’s the bank is meticulous about monitoring its loans. “It’s like getting a proctology exam every month,” the developer said. “But if you’re a depositor or an investor, that’s what you want.” [Crain’s] — E.B. Solomont