Liberty SBF: Small Balance Commercial, Getting Noticed
In 2011, Liberty SBF (“Liberty”) set out to become a specialty finance company that catered to small businesses in need of capital and with commercial properties to provide liquidity. Its strategy was to fill the void left by the larger lenders who had scaled back originations due to the increased risks from the financial crisis. Well, others have finally started to take notice of the opportunity, according to a recent Wall Street Journal Article, “New Lenders Enter Property Market and Think Small,” an early victory for Liberty. The article highlights several new entries to the space who recognize the opportunity, especially now that the economy is improving and the loans seem less risky.
Liberty has been along for the ride these past three years and is now an experienced lender with an established platform that sources, originates, manages and services small balance commercial loans nationwide. With offices in key locations across the country and a healthy pipeline of loans, Liberty SBF is increasingly being approached by the likes of Wall Street and investors to leverage their expertise and participate in the current opportunity afforded by the small balance commercial real estate space. CEO and Founding Partner, Alex Cohen recently spoke on a panel at an investor conference where he highlighted the investment opportunity of small balance commercial loans. He pointed out that the underlying collateral was still cheap to stock and fixed income markets and that loan structures provided very attractive risk reward profiles.
“Liberty SBF recognizes the opportunity, especially given where we are in economic cycle and the level of interest rates,” Mr. Cohen said. “Small Balance Commercial is a short duration asset that is long credit exposure to a recovering asset with a long runway and a conservatively low LTV, making it a very attractive opportunity in the current market.”
Unfortunately, it is nearly impossible for investors to get exposure to this asset class through the public markets, which is where Liberty SBF comes in. Liberty offers investors several ways to invest or co-invest directly into small balance commercial loan assets with full transparency and the confidence of working with a sophisticated origination and servicing platform. For investors looking for diversification, Liberty SBF offers a PE style fund that invests side by side with the company, offering equal alignment and transparency.
So while others focused on the recovery of the residential mortgage market or the new and improved CMBS market, Liberty SBF reinvested in the small balance commercial market with the hope of a similar fate. Those expectations are finally materializing as the market takes notice of the opportunity that Liberty SBF is in the best position to capitalize on.
About Liberty SBF: Liberty SBF is a full-service commercial real estate finance company that provides loan origination, loan servicing and asset management. The company has a special expertise in small-balance commercial lending, lending directly from its balance sheet and originating loans for its investment partners. For more information about Liberty SBF, please visit http://www.libertysbf.com.