ValueXpress has been arranging CMBS conduit loans for its clients for over 15 years. The typical client is a small balance borrower ($5-$10 million), and many do not have much or any experience in the diligence process (read: lots and lots of documents) required to close a CMBS conduit loan. Therefore, by default, our corporate mission has evolved to use our knowledge of the CMBS diligence process and our human resources to guide borrowers through both the underwriting diligence and legal diligence quickly and efficiently, resulting in the least-painful experience for the sponsor possible. At the same time, the diligence burden is reduced for the lender, whose thin staff can be reoriented to other transactions that are not moving as smoothly. “We end up adding value for both the borrower and the lender in each transaction,” commented Jim Brett, head of underwriting at ValueXpress. “This creates a win-win for us as a firm: Borrowers refer us to other borrowers and lenders move our transaction to the top of the pile as they know the transaction will not be time-consuming.”
On most new transactions, the ValueXpress deal manager is working on-site within a few days of the execution of a loan application. If the borrower does not have a scanner, the deal manager brings one. The sponsor and deal manager go through each item on the checklist; the deal manager explains what is needed and why, and reviews each item for compliance before it is submitted to Jim, who then catalogs all the diligence, usually in a file-sharing environment such as DropBox. “It’s all about organization and having the knowledge to work with the borrower to collect diligence documents that comply with the lender request,” notes Jim. “Once this is understood, the transaction proceeds quickly to close.”