Madison Realty Capital - A Private Commercial Lender

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December 24, 2007

Madison Realty Capital, a bridge lender, has seen a record spike in business and expects a record year in 2008. To this end, the firm has hired Eric Scheffler from Bear Stearns to manage its portfolios. "There is definitely a need for fast and flexible financing in this market… People know we can execute," said Joshua Zegen, managing partner and co-founder. The firm closed nine deals totaling $70 million in November, a 75% increase from normal volumes.

The New York-based firm sees room to expand its business. "Today, you have a huge percentage of the lending population sitting on their hands," Zegen said. Madison is fielding increased financing requests, particularly on deals in the range of $20 million to $30 million as well as on construction loans. "The volume has grown substantially [and] we’ve become a little choosier," he added. Over the past few months, Madison’s loan pricing has increased to nearly 13% from pre-credit crunch levels of 11%. The firm originates loans with one- to three-year terms, making loans of $1 million to $50 million with LTVs ranging from 50% to 75%.

Madison’s lending volumes topped $400 million in 2007 and Zegen expects volume to double in 2008. "We’re looking forward to 2008. We have liquidity, which is rare," he said. The firm also plans on launching a real estate opportunity fund of an undisclosed size within the next 12 months. The fund will invest partially in distressed debt.

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