Behind the Scenes of Urban Bay Housing Fund with Director Caleb Walsh

 

  1. First of all, tell us about your career and the decision to launch

Urban Bay was created to organize existing commercial real estate holdings around the country into a fund structure that would be a simpler way to provide our investors with returns. The formation of Urban Bay allowed the fund to focus on purchasing and funding debt securities as opposed to the previous business model which was the acquisition and redevelopment of CRE.

  1. Can you provide some key milestones of Urban Bay Housing Fund since its launch in 2008?

Urban Bay became a very aggressive buyer of CRE assets during the post-2008 recession and more recently in the 2020 Covid 19 depression. Milestones include multi-state acquisitions in the hospitality and multifamily space.

  1. What have been some of the challenges you’ve faced breaking into the industry?

Bank restrictions in lending on certain asset classes such as hospitality and affordable housing complexes. During 2020 and even today traditional lending facilities won’t touch certain asset classes, this is much of our decision to allocate a large amount of our fund capital toward debt securities that don’t have the same restrictive approach to lending.

  1. Can you describe Urban Bay Housing Fund today? What are the different types of loan programs you have?

Urban Bay offers loan programs both short and long-term with a focus on Bridge Financing. Because our fund decisions are in-house and don’t rely on a third-party committee, we have the ability to draft our own programs to fit the borrower’s needs. While we definitely exercise under a structure and our fiduciary guidelines, we often do CRE loans for scenarios outside the guidelines of traditional financing.

  1. What is your outlook for U.S. mortgage rates over the next five years?

There will be dramatic depression in certain categories of mortgages tied to assets such as malls and retail etc. because the world has changed. The smart developers are doing conversion projects which we fund every day.

  1. What sets Urban Bay Housing Fund apart from other competitors in the space and how does your approach shift the current trend?

We are investors funding investors vs bankers who have never been on the borrowing side. Once developers see the difference they would rather pay our rates and terms than deal with the red tape on the other side.

  1. Describe your business model and what are the core components that drive what you do?

True asset-based lending. If there is an LTV (loan to value) that makes sense with associated revenue we can make work. If not, we cannot.

  1. What is the mission driving Urban Bay Housing Fund and what primary goals are you looking to accomplish?

Funding developers and CRE investors who will return to us year after year.

  1. How do you see your company evolving in the next 3-5 years and what impact do you hope to make on the industry?

We will continue to open mortgage offices in key locations across the country as it becomes more normal for clients to meet in person again.

  1. What do you value most about the culture and vision of Urban Bay Housing Fund?

Creativity. Whether we are assisting a borrower with a Chapter 11 exit or originating a CMBS development plan our team works together as one unit to get each deal funded.

  1. Are you co-marketing with another lender?

No. We are direct and in-house.

  1. Can you tell me a story about a time you faced an ethical dilemma as a loan originator, and how you solved the dilemma?

We had a $16,000,000 mortgage where the borrower was unrealistic about, they are timeline to be refinanced. They had a foreclosure sale 13 days from the time we first spoke and while we could possibly have completed a payoff in time it was not 100% so we advised them to look into protective measures before we could help them.

  1. How do you ease investor concerns of faulty borrowers?

Focus on the value of the property, that’s really what we are in the business of.

  1. Where do you see Urban Bay Housing Fund evolving?

The deals we are receiving are so large I think that we will open new funds with new departments that focus on different size loans. But for now, we are happy to take on funding proposals 1 to 100 million.