City's middle market has special banking needs.

The real estate sector in New York should continue to benefit from increased property valuations for some time to come.

The larger projects, in particular, will enjoy the better pricing and leverage offered by big banks and Wall Street funds competing for their business.

"It is still a borrowers' market and I think that it will continue at least through 2005."

That's the assessment of Richard Rubin, who heads up the real estate finance group at New York's MetBank, an institution that specializes in middle market transactions.

"In just the past year there's been a 25% to 50% appreciation in valuations on the residential side depending on location. One project with which I am familiar on Park Avenue South, for example, was pegged at $1,000 a foot 12 months ago and is now valued at $1,500 a foot," Rubin noted in a recent interview.

Middle market real estate deals--those in the $3 million to $10 million range--may be less attractive to the bigger institutions but the dynamics are much the same, he said.

So, what's there to complain about if you are a developer or an owner?

"Not much, if you have a $50 million project and can command the prompt and personal attention of the larger banks and the Wall Street investment houses. But if you're a middle market player you are likely to be faced with a variety of approval and procedural issues that can cause deal killing delays," Rubin explained.

The problem, according to the MetBank First Vice President, is that typically bank loan requests can require multiple levels of approval that will slow down the process, often leaving the borrower uncertain about the status of an application.

"That can be particularly bothersome in buy/sell situations where, for example, there is a 'time of the essence' provision," he said. "It's a common complaint of borrowers that it is often hard to get clear answers on the exact status of the request. And, it's an issue that gives our bank an edge."

Rubin said that when MetBank was established five years ago one of its goals was to reduce the anxiety of borrowers by staffing up with individuals who know the real estate business and who have the ability to give their clients a higher level of confidence.

"Our group is very experienced. They come from various backgrounds, some from very large banks, mid sized savings banks and even a foreign bank. They all have a minimum of 12 to 15 years in real estate and banking," according to Rubin. He, himself, has spent more than 20 years in the real estate sector, the last ten as a commercial real estate loan officer in the banking industry.

"Generally, when a loan request first comes in at MetBank the loan officer who receives it will immediately assess its merits and bring it to me for a discussion and further evaluation. Once we have a handle on the deal, we can issue a term sheet quickly. This gives the borrower the message that we are on the same page and that we fully intend to proceed. We can then begin to conduct the necessary due diligence on the transaction in a timely fashion," Rubin explained.

"What it comes down to is that we are not afraid to make decisions. While other banks tend to rely on more people being involved in the process, we generally have fewer people. That's not to say that we take decision making lightly, but we go the extra mile to expedite what is normally a tedious process.

"At times, we will call a special credit committee meeting to get an urgent deal approved. Most other banks don't have that kind of flexibility."

Meanwhile, MetBank's loan officers are urged to keep open the lines of communication with their borrowers, letting them know the status of their application every step of the way.

"It's how we build and maintain relationships," according to Rubin.