Lender Spotlight: Southern Farm Bureau

PSRS recently spoke with Austin Moore, Realty Investment Specialist at Southern Farm Bureau, and asked him a few questions about his thoughts on interest rates and the market in the next couple of years. Read below to take a look at some of the other questions that he answered for us:

Where is Southern Farm Bureau winning deals? 

We don’t typically push proceeds, so we like to be competitive on spread, where we win most of our deals. The goal that we set for ourselves is to offer some of the lowest spreads in the market. Prepayment is another area where we win deals because we offer different types of prepayment flexibility depending on the loan without charging a premium. Borrowers and repeat borrowers are usually very complementary of our administration/servicing department and their willingness to be available and prompt with direction and decisions when it comes to transfers or other events during our loan terms.

Where do you see the market over the next couple of years and where do you see interest rates going in the next few years?

We foresee the CRE lending environment to become very competitive over the next 12-24 months with fewer transactions to go around. Not as many 10 year balloons maturing, most loans are already locked in at low rates, and the rising rates could reduce the number of sales transactions.

What are some interesting, out-of-the-box deals you guys have completed recently?

We put a self-storage deal under application before it was stabilized and then required it to be X% leased prior to funding. On another deal, the borrower proposed we finance one part of a condominium deal that included apartments, retail, and office. We proposed that we finance 100% of the project to alleviate shared ownership concerns, and ultimately ended up doing the deal.

What were some of Southern Farm Bureau’s numbers from 2018?

We closed 48 loans last year for a total of roughly $241,000,000. Our average loan size was roughly $5,000,000.

Southern Farm Bureau Program Summary

• Loan Size: $2-12 Million
• Term: 5, 10, 15, 20 year fixed
• Current 10 year rate: 4.15% (145 spread)
• Non-recourse
• Property Types: Office, Industrial, Retail, Multi-Family, Self-Storage
• Unique Loan Structures: Stepdown Prepayment from Year One, Automatic Rate Resets – 10+10, Assumable, Ability to “Top-Off” loan with NOI Growth