Correspondent Lenders

Phillips Realty Capital works with 25 capital sources to find the most competitive debt and equity structure for every transaction. Debt and equity providers seek out strategic alliances with reputable mortgage bankers, ensuring an opportunity to compete for a high volume of quality transactions, which enable them to meet their investment goals.

When the premium capital sources in the world compete for your business, you win. In addition to the open capital sources with whom Phillips Realty Capital has excellent relationships, you should give the following correspondent capital sources an opportunity to compete for your business:

Origination

Phillips Realty Capital provides the most efficient loan origination services through strong relationships with lending institutions, bankers, and private investors. Phillips loan origination services include investment analysis and valuations, deal pricing and sizing, complete underwriting, deal process management and closing and third party review.

Phillips provides clients with the following products and services:

  • Permanent Financing
  • Acquisition Financing
  • Construction Loans
  • Mezzanine Financing
  • Bridge Loans
  • Forward Commitments
  • Participating Debt
  • Sale/Leaseback Transactions
  • Equity Placement
  • Joint Venture Equity
  • Advisory Services

Debt Financing

Phillips Realty Capital provides long and short-term financing options including traditional, mezzanine, construction, bridge and structured loans, as well as debt and equity financing. The firm utilizes an extensive placement network of institutional investors and capital markets, including life insurance companies, pension funds, commercial banks, commercial credit companies and offshore investors.

Through its main D.C. office in Bethesda and satellite offices in Richmond and Charlottesville, Phillips provides financing for a variety of product types including office, retail, multi-family, industrial, condominiums and hospitality.

Each year, Phillips Realty Capital arranges approximately $1 billion in commercial real estate debt and equity transactions. Transaction size ranges from $2-$150 million.

Equity

As a supplement to leverage on commercial real estate transactions, Phillips Realty Capital offers a full range of Equity Placement Services, including the following:

Acquisition

Phillips represents sources interested in the acquisition of commercial real estate throughout the Washington DC metropolitan region. These sources seek to acquire well-located office, retail and industrial properties. Generally speaking, properties acquired are held for a long-term, with a minimum strategy of six years.

Transactions size ranges from $5 million to $50 million. Equity interests require a 100% position, however, lesser positions will be considered depending on the transaction.

Mezzanine

Supporting first trust financing, certain Phillips equity sources are available to provide mezzanine or “second-tier” financing. These equity sources require a preferred coupon rate of interest, commensurate with the transactional risk, as well as an “equity kicker”. When permitted by the first trust, a recorded second trust portion is required.

Transaction size for Mezzanine equity ranges from $5 million to $25 million.

Pre-Development

Phillips Realty Capital equity sources are also available to support the commercial real estate developer in the development of well located commercial properties. These equity sources require a preferred coupon rate of interest, commensurate with the transactional risk, along with a substantial ownership portion in the venture.

Projects must have a well-defined short term disposition strategy, generally less than a year after completion, that yields a minimum return to the investors of 25%.

Transaction size for Pre-Development equity ranges from $5 million to $25 million.

Loan Servicing

As a correspondent Mortgage Banker, Phillips Realty Capital provides comprehensive loan servicing on many of the loans that we originate. Phillips currently services a $2 billion loan portfolio on behalf of 25 institutional investors, including life insurance companies, pension funds and other capital market sources.

In 2007, in an effort to increase our level of service to our Lenders and clients, Phillips Realty Capital executed a Sub-Servicing Agreement with Essex Financial Services in Denver, CO.  Under this Agreement, Phillips outsourced the traditional loan administration functions to Essex.  These include the collection and remittance of monthly payments, the management of escrow accounts, and the compliance with individual Lender requirements on insurance, real estate taxes and U.C.C. filings.

This outsourced arrangement has enabled Phillips to focus on higher-level servicing responsibilities, such as the processing of all Lender and Borrower requests.  This includes ongoing asset surveillance of all the properties in the Phillips servicing portfolio, including the preparation of Watchlists on behalf of its Lenders.  Phillips also re-underwrites each property in the servicing portfolio on an annual basis and reports on the Lender’s risk position based on current market conditions.  In addition, each year, Phillips performs a physical property inspection of each property in its servicing portfolio advising each Lender of the condition of their collateral asset.

The Phillips servicing arrangement with Essex Financial Services has been warmly received by our borrowers and regarded by many of our Lenders as an industry model for the future.  Our goal remains to provide a superior level of customer service that rivals any in the mortgage banking industry.