Provided Appraisal Reviews for Loans Funded Through an Investment Bank’s Warehouse Lending Operation

A large global investment bank needed valuation assistance for its warehouse lending operation. The facility is focused on riskier loans for properties that are not yet stabilized – such as an office building in the lease-up process or a condominium project in the sales process – making them ineligible for standard commercial mortgage-backed securities (CMBS). The bank needed a third party to review the appraisals obtained by the originating lenders to determine whether to accept the loans as collateral for the credit line. The bank wanted a customized report to reexamine the key assumptions of the original appraisal, verify the information was accurate and up to date, and provide commentary on its reasonableness.

The client, who already worked with SitusAMC to support its underwriting and due diligence needs, engaged the firm for this valuation work. SitusAMC assigned a dedicated team of valuation experts with a single point of contact for the client to ensure quality, timeliness and excellent service. The team quickly onboarded the client’s portfolio, providing data-driven perspective on asset the client was concerned about, giving the bank leverage to explain why its position on an asset’s value may differ from the lender’s. 

SitusAMC’s approach helped the client mitigate risk and create a faster, more efficient warehouse lending operation. Due to the success of the relationship, the client, which had been working with two other valuation vendors, gradually increased its volume with SitusAMC, and eventually made the firm the exclusive partner for appraisal reviews. Additionally, the client expanded the engagement to include portfolio monitoring.