Regulatory Burdens Fuel Growth of Private Finance

Transformative change in the why that deals are financed is likely going to come from the private finance industry, rather than the banking industry, according to Sabal Capital Partners’ Jason Pendergist. This is because the banking industry is fielding regulations that make it difficult to respond nimbly to clients’ needs and market fluctuations.

“As banks are undergoing regulatory pressure around their real estate concentrations and growing pressure around the analysis of the real estate transactions that they do participate in, we believe that there are a number of very good clients with very good assets across the country that are simply unable to get appropriate financing solutions today,” Pendergist, president and COO of Sabal, tells GlobeSt.com. “We believe that we have the opportunity to create a small-balance conduit that can bring a bank like experience with simplified loan documents and make-sense underwriting.”

As a result of the regulatory challenges that Pendergist notes, good deals and good clients have been overlooked in the market. “We look around the marketplace and see the ever-growing regulatory burden that is placed on banks and the ultimate impact that has on customers,” he says. “We see a swath of the market that is either being completely missed or under-served, particularly in that commercial real estate space.”