Gantry Reports Steady Commercial Mortgage Production Across First Half of 2024

SAN FRANCISCO--Gantry, the largest independent commercial mortgage banking firm in the U.S., reports steady commercial mortgage production through the H1 2024, with overall Q2 2024 production values essentially mirroring Q1 2024 totals. While market activity remains subdued in the cycle’s current rate environment, strong indicators point to increasing demand for new originations moving into H2 2024 as the market responds to pending maturities, price discovery, and an improving policy climate with less volatility.

“Gantry’s loan production teams have remained consistently busy in the first half of 2024, successfully financing a broad range of assets and transaction types”

“Gantry’s loan production teams have remained consistently busy in the first half of 2024, successfully financing a broad range of assets and transaction types,” said Tim Storey, Principal with Gantry. “Borrowers have had a year to process the current higher rate climate as volatility has transitioned to consistency. Yes, we are in a higher for longer cycle as compared to a decade of historically low rates, but not at a point where most transactions can’t be aligned with the cost of capital still readily available in today’s market. If we see Federal policy shift to lowering rates later this year as expected, we should see a boost in confidence, overall improvement on rates, and an increase in transactional activity.”

Representative transactions from Gantry’s Q2 2024 production include:

Retail: $22.1 Million Permanent Acquisition Loan / Cityline at Tenley – Washington D.C.
Industrial: $16.25 Million Permanent Acquisition Loan / Fed Ex Ground Facility - Portland
Multifamily: $14.4 Million Construction Takeout Financing / 801 Pearl St – La Jolla
Self Storage: $15.5 Million Acquisition Financing / Moove In Facilities – New Jersey/Virginia
Medical Office: $8.2 Million Life Company Refinance / Irvine Medical Office Facility
Office: $9.5 Million Life Company Refinance / Bureau of Land Management - Phoenix

Production and Trends

The acceptance of a higher for longer rate environment has settled in after a less volatile 12-month period where Fed Fund rates have held steady, albeit at an era high. Subsequent predictability has helped identify strategies for sales and acquisitions, refinancings, and the new equity requirements of the current rate climate. If the Federal Reserve follows through with rate reductions this year, expectations are for a dormant market to return to life. In a cycle where debt service coverage is more relevant than leverage, conservative borrowers on performing assets are still finding ample cash neutral or cash out solutions for their maturities. Investment transaction volume continues to grow as new equity requirements, pending maturities, and redemption requirements shape mark to market price discovery.

According to Demetri Koston, Principal with Gantry, “Gantry’s key value proposition in 2024 is our consultative role with clients, focused on outlining specific investments goals and identifying property-specific attributes. We then canvas a roster of vetted lenders across the full spectrum of sources to identify the right loan for a specific business plan. Gantry’s time-tested and often exclusive correspondent relationships with most of the nation’s leading insurance company lenders have proved most valuable for our clients in this challenging cycle. The quality and flexibility of their programs, including attractive spreads, non-recourse terms, certainty of close, and rate lock at application have made them the today’s preferred provider of permanent debt and a new resource for higher yield bridge and participating loans.”

Relevant trend considerations for commercial mortgage production looking forward include:

Servicing

Gantry maintains its distinction as a Primary Servicer rated by Standard & Poor’s. With an $18 billion portfolio encompassing over 2,100 unique loans spanning the entire range of CRE asset categories, the firm's portfolio has consistently performed during a tough market cycle. The breadth, depth, and capability of the firm’s servicing division provides the foundation for Gantry’s strong and often exclusive correspondent relationships with many of the nation’s leading life insurance companies and conduit lenders.

Culture

Gantry remains committed to developing future commercial mortgage banking professionals through its summer internship program, with participants joining its San Francisco, Los Angeles, Orange County, and Upstate New York offices this year. These interns will be immersed into the full Gantry platform, completing loan production, servicing, and corporate operations assignments with respective mentors in each field.

About Gantry

At Gantry, independent thinking is in our genes. As a privately held firm, we take an intentional approach to everything we do. So, as our industry consolidates and becomes less personal, we push ourselves to ignore convention, to set a high standard and to always prioritize people ahead of profits. With over 30 years of experience of loan production and managing an $18 billion national servicing portfolio, our firm leverages a well-established correspondent-driven platform to construct the best financing solutions for our clients. For those seeking a partner that delivers more, we’re a little different. The right kind of different. To find out how and why, click here: www.gantryinc.com