Borrowers may have more choices in today's lending market.

Today's lending market is a varied-one with many avenues to achieve a given financial goal. As a result, borrowers may now have the option of conducting a transaction with either a portfolio or securitized lender. At M. Robert Goldman & Co., we represent twelve traditional portfolio lenders and three securitized lenders. There are times when a deal is a clear-cut life insurance deal and others when a conduit deal is the best execution.

When there is a choice between the two, we find an increasing number of borrowers are opting to utilize portfolio lenders for a variety of reasons.

* Reserves. Most portfolio lenders will limit the amount of reserves required. While reserves for taxes and insurance are fairly standard, reserves for lease rollover risk, deferred maintenance and capital improvements are required by portfolio lenders only when there is an acute need for them.

* Service. There is no substitute for good service, especially throughout a long-term loan. Mortgage bankers such as M. Robert Goldman & Company, Inc. fully-service all the loans placed with their insurance company correspondents. As a result, borrowers receive the maximum in flexibility and responsiveness throughout the term of the loan.

* Flexibility. Flexibility is of great importance when a borrower wants to release excess collateral, develop additional phases of a property or add secondary debt. With portfolio lenders, loans are structured such that borrowers can easily fulfill these needs.

* Elimination of uncertainty. When dealing with a portfolio lender, borrowers can typically lock rate by simply signing the application and putting up a refundable good faith deposit. The loan amount is typically finalized at this time as well, barring any material changes in property circumstances prior to closing.

* Ease of closing and lower costs. A borrower has the flexibility of choosing the ownership entity, often times the existing ownership. With a securitized loan, there are typically requirements for a newly formed single purpose entity, an independent board of directors, separateness covenants and a nonconsolidation opinion. All of these result in increased legal costs to close.

* Easy exit strategies. With portfolio lenders it is easier to get out of the loan by prepaying it or selling the property and having it assumed by the buyer of the property. Our life insurance companies typically require payment of a yield maintenance or fixed payment fee, after a lock-out period.

The payoff of a securitized loan typically requires defeasance, a process which is difficult and costly to achieve including the payment of fees to rating agencies, trustees and servicers. As servicers for our correspondents, assumption of a loan is also easier as we already have a relationship with our lenders and are in position to give a quick response.

Throughout the past year, we've negotiated several significant transactions in which the borrower chose to utilize a portfolio lender over a securitized lender. For example, we recently arranged $13 million in financing for a 324,455 SF warehouse in Woodbridge, N.J. owned and operated by the principals of the Amerex Group. Inc.

The refinancing loan was used by Woodbridge Enterprises, Inc. -- a company controlled by the principals of Amerex -- to pay off present debt, provide capital for strategic acquisitions and fund the possible construction of a 200,000-SF building on a nearby site.

Due to certain needs -- including the pending expansion of the facility -- Woodbridge Enterprises, Inc. chose to receive financing from The Guardian Life Insurance Company of America, one of twelve portfolio lenders we represent as a mortgage loan correspondent.

At MRG, we specialize in negotiating and sourcing the perfect loan to accommodate our customers' needs and desires, whether it be through a portfolio or securitized loan. However, when all things are considered equal, many borrowers believe, throughout the term of the loan that they are better served by the flexibility, lower cost, excellent service, ease and certainty of one of our portfolio lenders.