Smith Barney Shearson forms alliance with Remsen Partners

Real Estate Weekly, Feb 23, 1994

Smith Barney Shearson Inc., a subsidiary of The Travelers, Inc., and Remsen Partners Ltd. (Remsen), a privately-held real estate funding source headquartered in New York City, announced the formation of an exclusive strategic alliance that will provide long-term financing for commercial real estate on a nationwide basis.

Under the alliance, Remsen will provide funding to real estate owners and developers. The alliance expects to generate financing in excess of $1 billion during calendar year 1994.

The alliance with Remsen Partner Ltd. will allow Smith Barney Shearson to expand its presence in the commercial mortgage-backed securities market. Remsen, founded in 1985, specializes in the underwriting and funding of multifamily and commercial mortgages. The firm has been involved in refinancing approximately $700 mill ion of commercial real estate.

"Commercial mortgage finance is a growth area for our firm and we intend to be a major force in the marketplace," said Michael D. Youngblood, managing director in Smith Barney Shearson's mortgage finance department.

Smith Barney Shearson has significantly expanded its efforts in the commercial mortgage securities arena and served as lead or co-manager in $5 billion of mortgage finance transactions in 1993.

"We sought out Remsen for this relationship as a result of their knowledge and background in commercial real estate porfolio financings and their reputation for client service and responsiveness," Youngblood said.

Commenting on the announcement, William A. Teitelbaum, Remsen's managing partner, noted that, "We are extremely honored to be recognized by a quality institution like Smith Barney Shearson. "

"The bottom line is that Smith Barney Shearson has provided excellent service and committed capital for our clients. That's why we want to be part of their team," he added.

"Remsen's nationwide network of real estate owners and mortgage bankers, coupled with Smith Barney Shearson's institutional sales force and retail office network, complement one another well," Teitelbaum said.

"Smith Barney Shearson and Remsen are looking to establish long-term relationships with quality real estate owners across the country. This alliance serves as the mechanism to access and service these owners," he added.

"The real estate owners wants someone who is on the scene before, during and most importantly - after the financing," said Teitelbaum.

"While rates and terms are always important, we have found that many borrowers and their counsel are now focusing on the fairness and reasonableness of our legal documents and the responsiveness and customer service provided by the lending source," said Teitelbaum.

"Certainly this is a result of the real estate and banking environments of the 1980s," he added. Remsen is represented by the law firm of Jones Day Reavis and Pogue in the closing process.

"We are committed to providing the highest level of service, regardless of whether we are closing a $70 million, 10-property refinancing or a single $6 million mortgage," Youngblood noted.

The strategic alliance is designed so that a real estate owner can expect funding to take place very quickly typically 60 to 90 days from application to closing.

"One other unique aspect of the strategic alliance is that the program can fund mortgages as large as $30 million - allowing us to compete in a market segment which was previously the sold domain of insurance company type lenders," said Youngblood.

"The $15 million to $30 million individual multi-family mortgage market has been neglected," said Youngblood. "We want to expand in this sector, because we believe this will help us to establish lending relationships with quality real estate owners,' he added.

The strategic alliance will initially concentrate on multi-family mortgages. However, the firms are actively seeking opportunities in the hotel, anchored retail shopping center and industrial property sector.