Australia’s top commercial broker measures his success on client satisfaction, and with the COVID-19 pandemic creating challenges this has never been more important
The top commercial broker this year wrote almost double the value of loans that last year’s winner did. New to the listing, Catalyst Debt Capital managing director Adrian Lee wrote 60% of his loans in development finance and the remaining 40% in commercial property.
The brokerage specialises in these areas but goes above and beyond to provide a “full service”, from appointing consultants through to the negotiation of finance documents and working with the borrower until the facility is repaid or refinanced.
Lee prides himself on partnering with his clients and lenders, and this is what he puts his success down to.
“We get the best results for our clients because we are clear about what the realistic outcome is, and often over-achieve because of our strong relationships with our lenders based on credibility and trust,” he says.
Lee began broking after 12 years working in property finance, looking after groups ranging from smaller developers all the way through to listed institutions. He says broking attracted him because it allowed him to give broader advice that was not limited to a single debt solution or a narrow panel of lenders.
Looking at the construction space at the moment, Lee says that, in short, it is “confusing”.
“It’s too early to say what the medium- and long-term impacts of COVID-19 will be on the sector, as well as the broader economy,” he explains.
He adds that the uncertainty has resulted in lenders taking a more conservative approach, and many private lenders that usually fill the gap have pulled out of the space for the time being.
“Most lenders will now take a full belts-and-braces approach to security requirements and loan conditions, which makes it restrictive in terms of commencing project funding,” Lee says.
The commercial real estate space is also challenging. Lee says liquidity will be a continuing problem and will have a material impact on values. He adds that investors and landlords will need to be proactive in managing their tenants and accept that “short-term pain will result in long-term gain”.
Before the pandemic, he says banks were opening up to commercial funding and there was increased appetite from non-bank lenders, driven by the lower cost of funds and investor appetite both domestically and offshore. Moving forward, however, Lee expects to see continued uncertainty. He says lenders are still unsure of their appetite as investors may withdraw from the market and many borrowers are putting their projects on hold.
“Transactions which were considered vanilla not long ago will be incredibly challenging to fund,” he says. “We need to face into that and be there for clients to help them navigate this uncertainty.”
As the broking industry faces these challenges, Lee says he is preparing by actively engaging with lenders, borrowers and market experts so he and his team can be fully educated and prepared to continue finding solutions.
“We are making ourselves fully available – while appropriately social distancing – to clients and non-clients alike to see who we can assist,” he says.
Total value of loans settled: $454,000,000
Number of commercial loans settled: 34
Average commercial loan size: $13,352,941
Years as a commercial broker: 7