CAPITAL SOURCES

We arrange loans ranging in size from $1M to $100M+, on commercial properties (office, retail, multi-family, and self storage) that generate positive cash flow, utilizing capital from:

I. Our exclusive Life Insurance Company correspondents;

II. Our direct, 20-year relationships with Wall Street (Commercial Mortgage-Backed Securities);

III. Our network of Banks and Credit Unions across the United States. 

 

I.  Life Insurance Companies

The investment objective of life insurance companies is to balance an investment portfolio amongst stocks, bonds and real estate. With regards to real estate, insurance companies can invest equity in real estate or in real estate mortgages. Typically an insurance company will want approximately 15% to 20% of their portfolio invested in real estate and real estate mortgage investments. By lending money on commercial real estate the insurance company is looking for current yield on its investments. To that end, the only thing the insurance company is getting out of its investment is interest income.

 

AEGON Realty Advisors, Inc. 

Based in Cedar Rapids, Iowa, AEGON is the US presence of a very large Netherlands based insurance company. Their appetite for real estate mortgages is very large. In any given year AEGON will lend between $1 billion and $5 billion. Largely a real estate lender focusing on the location and occupancy of the project rather than the credit quality of the rent roll, AEGON is very good at loan structuring, often times trading amortization for loan dollars. As a lender, they will look at loan amount per square foot/loan amount per unit parameters. On an acquisition with real equity going into the project they are able to get more aggressive on loan dollars. Pricing is competitive but not the best in the market. Pinnacle has been a correspondent for AEGON for over 10 years winning numerous production awards in the last 5 to 7 years.

 

American National Insurance Company 

American National is headquartered in Houston, Texas. From there they originate commercial real estate loans that are driven based on analysis of the real estate fundamentals. American National is looking to originate loans from $1 million to $10 million. They are particularly adept at industrial and retail loans. Amortizations range from 15 to 25 years. American National offers interest rates that are slightly above the average interest rates, however, they are typically willing to make loans with structures that work around a deal’s potential risks. Additionally, recourse can become part of the structure in order make deals work for the desired loan.

 

Genworth Financial, Inc. 

In 2004 GE Capital spun off their insurance company arm and took them public. The result, Genworth Financial is now a publicly traded conglomerate of smaller life insurance companies. Genworth is based in Stamford, Connecticut where they originate loans from $3 million to $25 million. They are focused on real estate fundamentals in evaluating loan opportunities. This is a lender looking for investment opportunities that create solid yields for the insurance company.

 

Assurity Life Insurance Company  

Assurity Life is based in Lincoln, Nebraska. They make loans ranging from $500,000 to $4.5 million. Assurity is a flexible lender that has the ability to make loans on a wide variety of assets.  Their rates are competitive and they offer amortizations ranging from 15 to 25 years.

 

Ohio National Financial Services 

Ohio National Financial Services is the marketplace name for the affiliated companies of The Ohio National Life Insurance Company, headquartered in Cincinnati, Ohio. Originally founded as a stock company in 1909, Ohio National converted to mutual company status in 1959. In 1998, Ohio National reorganized as a mutual insurance holding company. The mutual insurance holding company is Ohio National Mutual Holdings, Inc.; the intermediate holding company is Ohio National Financial Services, Inc.

 

One America Financial Partners, Inc. 

One America is a small life insurance company designed to produce between $100 million and $200 million of commercial real estate loans per year. Based in Indianapolis, Indiana, they are predominately a credit driven lender who focuses on the credit quality of the tenants on the leases. Relative to other alternatives, One America offers aggressive interest rate pricing. Amortizations will be set close to lease expirations.

 

Protective Life Insurance Company 

Based in Birmingham, Alabama, Protective Life has grown from lending $100 million on an annual basis 10 years ago to lending over $1 billion in 2005. They have focused on their core business which is lending to developers who have credit anchored projects. Protective sets its rates based on large movements in the market, therefore rates do not change on a daily basis. They have money from 5 to 25 year terms with amortizations up to 25 years. Protective tends to lend money in smaller markets then do most other insurance companies. Because they are reliant on the credit of the tenants, they are less concerned with the size of the market they are lending in. Protective Life is very good at forward commitments, and in fact, will lock rate for up to 12 months at no charge to the borrower. One of the mainstays of the Protective program has been their participating loans. In this product they will lend up to 85% loan-to-value and participate in 50% of the after debt service cash flow of the project.

 

 

Prudential Mortgage Capital Company 

In 2003 Prudential Insurance “de-mutualized” the company and sold stock to the public. Today they are one of the largest insurance and financial companies in the world. Shortly before going public Prudential bought Washington Mortgage, a large FNMA and FHA lender. Through the insurance companies and the FNMA and FHA programs, Prudential will lend approximately $3 billion per year. Prudential also has a CMBS lender arm. They will lend money from 5 to 20 year terms with amortizations up to 25 years in the insurance company. In the FNMA and FHA programs they can lend on terms and amortizations up to 40 years. They are a very aggressive lender on spreads, particularly with low leveraged deals. Based in Newark, New Jersey Prudential has full service satellite offices from which they will originate loans. These satellite offices are located regionally throughout the country. 

 

StanCorp Mortgage Investors, LLC 

StanCorp was established as a holding company in 1998 to facilitate the demutualization of Standard Insurance Company. On April 16, 1999, StanCorp issued its first publicly traded shares on the New York Stock Exchange, under the stock symbol “SFG.”StanCorp places a large volume of small loans ($500,000 to $3,000,000). StanCorp is known for its expertise in unanchored retail. StanCorp will look at all property types though and usually includes recourse in their deals.

 

Ameritas Investment Partners  

The merger of Summit Investment Partners and Ameritas Investment Advisors in 2006 united seasoned teams of investment professionals from each of the advisers into one team under the Ameritas Investment Partners name. Ameritas Investment Partners is comprised of three entities: Ameritas Investment Advisors, Inc.; Ameritas Investment Partners, Inc.; and Union Central Mortgage Funding. Ameritas Investment Advisors, Inc. and Ameritas Investment Partners, Inc. are registered investment advisors managing more than $9.5 billion in assets for insurance companies, public and private pension funds, endowments, foundations, mutual funds and high net worth individuals.  As of 12/31/08, Union Central Mortgage Funding services more than $419 million of performing first mortgage loans that it originated, aggregated and sold via securitization over the past ten years.

 

Symetra Life Insurance Company 

With roots dating back to 1957, Symetra Financial has grown to become a family of companies that together serve more than two million customers in all 50 states. Originally a part of a Seattle-based Fortune 500 insurance company, on Aug. 2, 2004, the life insurance and investments subsidiaries were purchased by an investor group led by White Mountains Insurance Group, Ltd., and Berkshire Hathaway Inc. Together, these companies became the privately held corporation known today as Symetra Financial.

 

Teachers Insurance and Annuity Association-TIAA 

TTIAA-CREF made its first real estate investments in 1947; today they are one of the largest commercial real estate owners in the nation. TIAA directly owns more than 700 properties in the United States and Europe with a net worth of more than $23 billion as of September 30, 2008. Because diversification is just as important for real estate as it is for stocks and bonds, TIAA-CREF’s real estate holdings are well diversified, both by region and by type of property. Their property holdings are spread throughout the geographical regions of the United States and include offices, apartment houses, industrial properties and retail complexes.

 

II. CMBS (Commercial Mortgage-Backed Securities) 

The investment objective of the CMBS lenders is to fund a loan (usually off of a line of credit) with the specific intent of selling the loan after it has closed. This usually happens within 60 to 90 days after the closing of the loan. They have the ability to hold a loan for up to 180 days past funding but prefer to sell their loans as quickly as possible.  Most CMBS lenders are either large national banks, investment banks, or insurance companies.  In early 2010, Bernard Financial Group arranged the first Michigan CMBS transaction in over three years.  Since then, a handful of our Wall Street lending platforms have had successful securitizations and business has blossomed.

 

III. Banks and Credit Unions

Bernard Financial Group will in certain circumstances work directly with banks to fund loans. In instances where a project isn’t necessarily ready for a permanent fixed-rate loan, we will work with banks to get construction or redevelopment loans funded. A bank’s process differs from a life insurance company or CMBS lender in that they focus their underwriting more on the credit of the borrower than the quality of the asset.