The TMG Due Diligence Interview Series – Let’s Talk SBA Finance!

Welcome to TMG’s next installment of its Due Diligence Interview Series where we sit down with leading DD professionals to get their take and place in the market!

Today we are with Belinda Rosthenhausler, Commercial Loan Officer at CDC Small Business Finance. Belinda can be reached at [email protected]

 

JFM: Belinda, your career has centered around commercial real estate and finance.  Share a little bit about what your firm provides, for whom, and where in the transactional and development cycle does CDC become involved?

BR:  I’m a loan officer with CDC Small Business Finance, certified by the SBA to administer SBA 504 loans.  My role is to underwrite commercial real estate and equipment financing requests, verifying SBA eligibility and working with clients through their due diligence period.  The goal is to receive SBA approval and clearances on both appraisal and environmental reports within the purchase contract due diligence period.

 Leads come from bankers or commercial real estate brokers working with end users seeking SBA financing.  I ask to get involved as soon as a someone is considering purchasing commercial real estate – before executing a contract on a commercial property.   The process is grueling and will take a minimum of 60-90 days. 

JFM:  We hear from due diligence providers that the first half of 2022 was robust.  July, August a bit more tepid.  What have you seen and heard from your clients?

BR:  I was buried the first half of 2022.  The summer slow down is expected every year, this year was odd.   June was quiet, July was dead and August is bringing new opportunities – mostly construction requests.  Lack of inventory, interest rates rising and the strain of construction costs rising made everything more difficult.  Buyers were giving up and continuing to lease versus purchasing commercial property. 

 JFM: With this rapid changing economic news (job growth, inflation, interest rates), what advice would you offer to prospective buyers when seeking financing?

BR:  This is the new normal, costs are higher.  Either they will pay more in lease rates once again or pay more for purchasing commercial real estate now and secure their space for the next 25 years.  The SBA 504 loan is a fully amortized loan over 25 years, interest rate is fixed for 25 years.   Lack of inventory will require more new construction, this allows for built-to-suit opportunities and include any equipment needed. 

JFM:  What challenges and opportunities do you see for the next 6-18 months.  Optimistic?

BR:  Interest rates will continue to rise, they were historically low for far too long.  Everyone feels they should qualify for 3% interest rates, that ship has sailed.  I’m optimistic that the reality will set in and owners will move forward with purchasing.  The lack of inventory will remain a challenge, the need to purchase will remain strong and somehow this will all work out!

 

Have Environmental Questions on Your Next Project? Please feel free to reach out anytime for a friendly conversation at 602-418-3949!

 

Joseph F. McGovern, PBD                                                              Karissa Anderson, PBD
Managing Principal                                                                         Principal
[email protected]                                                         [email protected]

HISTORICAL Phase I ESA Reports (i.e., older than 6 Months).  Still good?  Many Ways Yes!

Real estate and deal professionals quickly turn to the conclusions of a Phase I Environmental Site Assessment report and for good reason – are there environmental issues that could affect the transaction and long-term liability. These come in the forms of Recognized Environmental Conditions.

But wait, there’s more! We get that is the primary purpose of a Phase I report.  The report also has info that is pertinent to all transactions.

  • Development history
  • Property ownership
  • County Parcel info
  • Construction Dates
  • Neighboring and vicinity property details

Phase I reports can have a life of their own.  They get passed around to various entities and advisors.   And believe it or not, some deals go dark.  When it comes back to life with current or future parties, historical Phase I’s can provide a basis of Property data.

 

TMG offers high quality and timely environmental and building due diligence across the United States!

 

Have Questions? Please feel free to reach out anytime for a friendly conversation at 602-418-3949!

 

Joseph F. McGovern, PBD                                                              Karissa Anderson, PBD
Managing Principal                                                                         Principal
[email protected]                                                        [email protected]

A Warm Thank You!

Partners / Relationships / The Group / The Team!

 

Service does not happen in a vacuum. It requires a cohesive interaction of professionals – Project Managers, Vendors (we call them partners), and the client relationship – working in sync to deliver timely, practical and superior value.

Seems like we don’t say THANK YOU! Nearly as often as we should. With that we say thank you Partners, PMs, and Client Relationships! Together, we make good things happen.

Did you know?

 

    • TMG’s Project Managers average 24 years’ experience. Each project is managed and conducted by senior level staff. Not just overseen and “reviewed by”. We mean “done by”!
    • Environmental and Building Due Diligence (Phase I & II ESAs, Property Condition Assessments, Asbestos Surveys, Compliance Review) continues to be a core strength.
    • Air Emissions Permits, Environmental Compliance Assessments, and Soil Vapor Intrusion studies are also in our wheelhouse.
    • From Non-Profits to Private Equity firms, clients have engaged the “Group” from Hawaii to Massachusetts. National coverage with localized knowledge and service.
    • It’s a team.
    • It’s cool!

 

Hats off to you! You know who you are. Thank you for being our secret sauce.

Interested in a friendly conversation? Please feel free to reach out anytime!

 

Joseph F. McGovern, PBD                                                                Karissa Anderson, PBD
Managing Principal                                                                           Principal
[email protected]                                                           [email protected]

 

 

 

Environmental Due Diligence

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Environmental Due Diligence – The Makings of a Deal Team

due-diligence

Since The McGovern Group opened its doors in 2014, no other element has affirmed itself as much as the need for the due diligence members to work together as a team. We all wish we could say all of our projects have gone swimmingly – seamless, on budget, glowing client recommendations. Most of ours I dare say have, which is due multiple variables – relationship based clientele, clear understanding of objectives, and a trusting team in place.

The common thread when things go south is the trusting part of the equation is strained. Sometimes team members don’t mesh, other times competing agendas have ruled the day, and/or deal objectives were not understood by all parties.

So start off on the right foot. As always, there are three “simple” steps:

  1. Introduce Members, Identify Roles, and Establish Lines of Communication:

Something as simple and easy as personal introductions, developing rapport between team members, answering questions early on, confirming understandings of project facts and needs, and establishing preferred lines of communication between team members, all lead to efficient teamwork.

2. Team’s Understanding of the Deal Objectives:

The due diligence scope may vary depending on the Client’s business objectives. A buyer and seller’s risk tolerance may be different. The strategic importance of an acquisition may outweigh other factors. Does a purchase involve a real estate sale or lease? Asset or stock purchase?   Understanding the deal objectives will enable the team offer skillful and deal-appropriate representation.

3. Communicate. Have each other’s backs.

Practice cold calculating reason. Meaning? Be straight and direct. With face to face interaction more of the exception, it is not inconceivable communication can veer off track. For the benefit of the client, help get each back on the bus. It’s what teammates do.

Call The McGovern Group with your due diligence questions. Conversations and picking of the brain is part of Step #1.

 

A Simple Message from The McGovern Group – THANK YOU!

thanks

After just over two years in business, 75+ client organizations, hundreds of projects, working in a dozen states from Hawaii to Florida, we think it’s high time to send a heartfelt THANK YOU! to all of our relationships – clients, staff, referral sources, vendors and subcontractors.

Together, with your help, look what we’ve done!

    • Air Permit in Hawaii
    • Mold Remediation in Bel Air
    • Env. Due Diligence for Multi-Site Private Equity Acquisition
    • National Env. Due Diligence Program for Rental Company
    • Site Investigation for 40,000-gallon+ Industrial Spill
    • Env. Due Diligence for Aerospace Manufacturer
    • Building Due Diligence / Property Condition Assessments for
      Multiple Investment Groups
    • Env. Due Diligence, National Home builders, Property Redevelopments
    • Underground Storage Tank Removal, Arizona Non Profit
    • Asbestos Management Program, Multi-Site Non Profit

Not half bad! It’s a relationship game and no one understands that better than The McGovern Group. Thank you team. Here’s to the second half of 2016 and beyond.

Sincerely,
Joe

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