Parkview Financial set a new record in 2020. Despite the pandemic and the market dislocation, the firm closed $600 million in construction loans nationwide, a total of 26 deals. More than half of this activity occurred in the fourth quarter, with $330 million in loan origination volume. Both the year and the quarter were the most active in the firm's history.
"I think there is a message about why this has been a successful year for Parkview. It is the result of a few different things—first, our structure enabled us to let us do more where other lenders were limited on what they could do," Paul Rahimian, CEO, Parkview Financial, tells GlobeSt.com. "Second, I think that it is important to note that we are in the position we are in now because our deals have historically penciled. We only underwrite and close deals that make sense regardless of where we are in the real estate cycle."
As a result of this strategy, the firm had only one loan enter default in 2020, during the pandemic. "It shows that our approach to how we underwrite deals is working," says Rahimian. "Ultimately, lending decisions shouldn't be just about the overall current economic climate—property valuations and pro formas need to be considered on a one-off basis that looks at the local market, supply and demand, inventory, and track record of the borrower."
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The activity in the fourth quarter specifically showed the early stages of recovery. "When the pandemic shutdowns happened, everyone was uncertain of the direction things were taking," says Rahimian. "We stopped lending for about four months, but it was a mutual pause as our would-be borrowers did the same. The majority of the construction industry was at a standstill because even if a loan was going to happen, in general, permits were heavily delayed or not being issued at all, the supply chain for building materials was disrupted and construction activity in some cities was actually prohibited."
This changed at the end of the year. Many developers that had pressed the pause button pressed play and wanted to close funding before the end of the year. "As we entered into the fourth quarter of last year, projects that were stalled, on hold, or pending prior to the pandemic were now ready to fund," says Rahimian. "Additionally, we were fortunate to secure a number of new borrower clients that weren't able to move forward with traditional lenders. Either those lenders denied their financing request, or they were ready to get building and didn't want to wait an unknown, extended period of time to secure a loan."
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Kelsi Maree Borland
