In September 2021, IDB Bank closed on a $35 million loan for a 54,074 square foot, one- and two-story building with space for six tenants, four of which are currently occupied by national brands. The property is situated on a real estate gold coast 20 miles from Manhattan and 50 miles from the Hamptons: Manhasset’s legendary “Miracle Mile,” home to luxury shopping boutiques and more than a little history (Billy Joel once sang about cruising on it).
“This is iconic real estate, in a part of Long Island IDB knows very well,” says IDB Senior Banker Shirly Dayan, who worked closely with the sponsors and referred the deal to IDB’s Commercial Real Estate Group. “Our industry and market knowledge is a major value-add for our clients. Not only do we get the job done for them, we see the value in what they’re doing, and where.”
In the same month, in Palm Beach, Florida, IDB served as the syndication agent on a $105 million on a multi-family residential property. “This type of loan facilitation is right in our wheelhouse,” says IDB’s Head of Loan Syndications and Sponsor Finance, SVP Chris Dowd. “It’s just one example of some very interesting and complex syndications we were able to execute in 2021.”
These two examples — one commercial, one residential — demonstrate IDB’s reach in the real estate space and its growing presence in the Florida, New York and California markets. In total, these three branches of IDB totaled 43 transactions in 2021, totaling $631 million in commitments.
Impressive numbers to be sure, but IDB’s Senior Vice President and head of CRE, Gardner Semet, isn’t satisfied: far from it. In his estimation, word is still getting out about IDB’s capabilities and experience in facilitating real estate transactions.
“We’ve evolved along with our customer base,” Semet says. “We have a separate department, with New York Real Estate lending to investors in properties in many different classes.” To date, IDB has financed deals involving apartments, retail, mixed-use, hotels, warehouses, condo units, shares in cooperatively owned buildings and credit lines to investors.
According to Executive Vice President, Chief Lending Officer, Lissa Baum, IDB’s next move is to broader awareness of what it can offer. “Along with delivering the customized solutions our CRE clients need, and strengthening our relationships with investors, developers, mortgage lenders and property owners, we’re hoping to find more opportunities by spreading the word about who we are and what we can do.”
To that end, IDB hired Avi Lieberman as its new Business Development Officer for commercial real estate. Lieberman has an impressive résumé, having played a significant role in the large expansion of Amerant Bank’s real estate book since 2012. As the bank negotiates the market and impacts of the coronavirus pandemic, it is determined to let its core competencies shine brighter and build off its extensive capabilities and expertise in real estate.
IDB’s client base is middle market and well-established in industries such as apparel, healthcare food and beverage and technology. Commercial real estate lending — which received a major boost when customers in other industries started to buy property to diversify their assets —represents one of the largest segments of bank’s business. Since many of these deals arose from asset diversification for IDB customers in other industries, IDB’s commercial real estate successes have accumulated quietly. Lieberman’s job will be to increase awareness of IDB’s offerings and expertise in the CRE sector.
“We helped many weather the initial shocks, without selling a single mortgage to distressed note buyers” says Baum. “We’re not newcomers. We’re the wise friend who is able to help in ways you haven’t yet thought of, and we’re determined to get the word out in our established markets.”
Providing steadiness and diverse solutions in volatile markets
Serving customers means being able to deliver complex and often unique solutions. “Our customers know us and understand our varied offerings,” says Baum. “IDB originates commercial mortgages, including construction, bridge and land loans, in addition to making loans against loans owned by our customers. With IDB’s own trading desk, customers can hedge interest rate and manage foreign currency transactions and hedging. Along with cash management, all the bank’s commercial services are a value-add to the lending we do in CRE. The diversity of the offerings and how we use them to support our clients is our distinct advantage.” Additionally, IDB has also developed a syndication department, allowing it to make larger loans real estate and corporate loans than the bank had in prior years.
“Avi and our expanded syndications desk bring us a lot of experience and connections,” says Louis G. Barone, IDB’s Head of Sales, Commercial Bank. “The opportunity here is to apply all that to IDB’s relationship-driven model and use it as a springboard to the next level of growth. Avi will help us expand to clients who are adjacent to our current clients and really raise our profile in this space.”
Booking loans that expand customer options
IDB has continued to support clients with loans on the higher end of their average. In addition to local deals and standard real estate loans, IDB expects to help its customers leverage even more assets as their opportunities and strategies evolve, particularly those in Israel, where the bank’s is headquartered and retains strong ties.
“We’re always working with Israeli investors who are looking for New York-based lenders with deep regional know-how,” Lieberman says. “But if they also decide to buy property in international markets, we can provide operating accounts in the local currency, manage their foreign exchange and provide 1031 funds to protect gains through IDB Capital. Our goal is to see their real estate strategies in a wider context and maximize every opportunity.”
IDB historically has cultivated long-standing relationships, in which the bank and its customers know each other well enough to make trust the most important aspect of interaction. For Lieberman, IDB’s track record and flat structure are ideal for delivering on the terms of the deal.
“In the real estate business, your client has to trust that you’ll deliver what your term sheet says, and that’s a big part of what IDB is about. We can also make some pretty exciting things happen, moving quickly when a valued customer has a time-sensitive opportunity. With this institution’s reputation and capabilities, I’m confident we can continue expanding our book in this market.”