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Mission Capital's New Mission: Providing Debt to Note-Buyers

One of the nation's best-known note-sale specialists is starting to build a team dedicated to arranging debt financing for commercial properties around the country. And if the Mission Capital Advisors brain trust has its way, in many cases the new mortgage banking push will entail serving the same investors that purchased distressed debt though Mission.

Likewise, lenders selling distressed and performing mortgages through Mission Capital will presumably welcome inquiries from the firm about new debt Mission's clients need in pursuit of real estate investment strategies.

In select cases, Mission Capital's debt placement team will work with investors needing as little as $1 million to acquire, improve or refinance properties. These will primarily be parties that have established a relationship with Mission operatives via its high-volume commercial and residential note-sale activities.

Mission also expects to be active arranging small-balance debt deals that are components of larger portfolio-type engagements, explains president William David Tobin.

Mission Capital, which handled well over $4 billion in commercial loan sales last year, is conservatively targeting $500 million in debt-placement activity this year. So for 2011 its sub-$5-million debt transactions aren't likely to exceed $50 million.

But given the firm's ever-expanding relationships with lenders and borrowers - not to mention the team's expertise with financially challenged assets - chances are its mortgage banking activities will exceed those early expectations as credit markets continue loosening up.

"We prefer to under-promise and over-deliver," says Tobin, co-principal of the company along with Joseph Runk.

Mission's debt team has something of a built-in borrower prospect list, given the thousands of investors around the country who have inquired about notes that lenders have engaged the firm's specialists to sell. Those that won the bidding, have taken control of the collateral and are now looking to invest more capital or refinance are logical mortgage-banking clients, Tobin relates.

"As a source of deals, the symbiotic nature of the business is great for our mortgage banking customers," he continues. "Our database of investors and successful (note) purchasers is quite large. And we are well-suited to assist them in financing assets they purchase from us, whether in note form or at such time as they take over the real estate."

Tobin and associates also expect that as they seek financing for investor clients, they'll establish more relationships with lenders - which of course will sometimes need the kind of disposition expertise Mission Capital offers. "So there is a symbiosis there as well," Tobin observes.

Mission's debt team - headed by Jason Cohen and Jordan Ray, who came to the firm from Ackman-Ziff Real Estate Group - is also looking to forge correspondent relationships with lenders, and working with other intermediaries. The near-term plan is to stick with senior debt placement mostly - with exceptions being the larger transactions, Tobin explains.

Mission Capital is looking to add perhaps 10 more debt placement pros over the coming year in its network of offices around the country: the Manhattan headquarters, Palm Beach Gardens, Fla., Austin, Tex., Newport Beach, Cal. - and an upcoming addition in Grand Rapids, Mich. "We will continue to grow as we identify human capital," Tobin says.

And fortunately for some borrowers, the team won't shy away from secondary and tertiary markets if conditions and transactions are right.