Münchener Hypothekenbank has resumed lending in the US, a market it pulled back from in 2009, to further expand its international portfolio.
The German mortgage bank is keen to lend again in the US through loan participations in the syndication market, as it did prior to the financial crisis, Guido Zeitler, who is head of the bank’s international debt investments and responsible for the US business line, told Real Estate Capital.
“We want to lend again in the US to diversify geographically and because it’s a well-known market to us.”
– Guido Zeitler
“We are aiming to do approximately a deal per month after a ramp-up phase, which will represent about $400 million or $500 million per year,” Zeitler said.
The bank committed to its first senior loan participation by the end of September, a month after it obtained all the necessary approvals to re-launch its US platform. In the five years following 2004, when the bank started its US lending activities, it built up a loan book exceeding $4 billion.
“We want to lend again in the US to diversify geographically and because it’s a well-known market to us. In addition, pricing is still superior to Europe, especially to German or French loans,” Zeitler said.
MünchenerHyp’s sweet spot for US lending is between $30 million and $50 million per single asset, and $75 million for a portfolio. The bank will provide senior commercial mortgage lending of around 60 percent loan-to-value, a conservative approach which will allow the bank “to have cushion for the next downturn”, Zeitler noted.
“We will focus our lending activities in the major markets on the East Coast in Boston, New York City and Washington DC; and on the West Coast in Seattle, San Francisco and Los Angeles. We will also lend in Chicago and in Houston,” Zeitler added.
Overseas expansion has driven higher lending at MünchenerHyp in the nine months to the end of September, when it wrote €1.4 billion of new commercial property lending, representing an increase of 55 percent year-on-year.
MünchenerHyp’s local market accounted for €1 billion of the bank’s new CRE lending through Q3, with the remaining allocated to the UK, France, Spain and the Netherlands.