LA JOLLA, CA—Pontus Capital focuses on corporate sale-leasebacks as a financing transaction, a niche that has grown in importance since the recession has created a less-democratized credit environment, managing partner Michael Press tells GlobeSt.com. The locally based, private real estate investment firm has found great success as a financing company. We spoke with Press about what has led Pontus to this success and emerging trends he sees in the CRE financing realm.

GlobeSt.com: What has led to your firm's success as a financing company?

Press: Relationships. We're a private real estate investment firm, but for our customers we are a financing source for sale-leasebacks, where investors are buying a property from an owner/occupant and leasing it back to them. It's much more of a corporate-finance transaction, and it tends to be relationship- and event-driven transaction.

When a company needs capital, it looks to a relationship to access that capital. So, for us, most of our transactions are bought through off-market or relationship transactions, not through brokers or the auction process. Since it's a corporate-finance transaction, a lot of times our financing is being for certainty of close, and that's where our reputation comes into play. In a strong M&A environment—an event-driven business—you tend to see more business and more opportunities. The number of companies looking to grow or acquire has increased, and as a function, our opportunity set has increased.

GlobeSt.com: What trends do you see emerging in the CRE financing realm?

Press: It's a bifurcated market between the haves and the have-nots of borrowers in general. We compete most frequently against other types of financing. We don't see a lot of business with highly rated-credit companies. Before the recession, there was more democratization of credit, but now all the banks and Wall Street seem to focus more on giving more and more capital to a smaller group of people—which is why you've seen a proliferation of alternative-lending platforms since the recession. We don't really see that changing. Our customers, which tend to be lower-middle-market companies, doesn't have the same level of financing alternatives they had pre-recession, so this trend could continue or worsen into some sort of recession.

GlobeSt.com: Do you anticipate the same or higher volume for your firm for 2017?

Press: We don't provide guidance on volumes, but I believe that the same factors contributing to our success last year are still evident today.

GlobeSt.com: What else should our readers know about the current state of CRE financing?

Press: Now is a great time to access the sale-leaseback financing market. Like any market, demand ebbs and flows, but today demand is high. Timing is everything in life; it's the old adage of whenever you're looking for financing it's not available, and when you're not looking for it, it is. While it's there, you should take it.

GlobeSt.com: What has led to your firm's success as a financing company?

GlobeSt.com: What trends do you see emerging in the CRE financing realm?

GlobeSt.com: Do you anticipate the same or higher volume for your firm for 2017?

Press: We don't provide guidance on volumes, but I believe that the same factors contributing to our success last year are still evident today.

GlobeSt.com: What else should our readers know about the current state of CRE financing?

Instant Insights /

Finding a Niche in the Financing Realm

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