Last fall we featured Adam Finkel and Kyle McDonough in our Changing of the Guards story where we highlighted some of the valley’s most up and coming real estate professionals in brokerage, finance and development. In the beginning of 2015 Mr. Finkel and Mr. McDonough broke off from their respective firms to launch their new Phoenix-based structured finance company, Tower Capital. The firm specializes in debt and equity placement on behalf of commercial real estate investors throughout the country. They offer borrowers short term bridge solutions through their in-house private lending platform, as well as conventional financing through their commercial mortgage brokerage division.
First launched last February, the firm has completed close to $100 million in total loan originations in their first 12 months of operations, with multifamily representing 44% of total production volume, hospitality representing 41%, office comprising 14% and land at 1%. Commenting on their success, principal of the firm, Adam Finkel, said:
“We have found that hospitality has been a really underserved sector when it comes to commercial real estate mortgage banking and brokerage. There just aren’t that many people focusing on these properties when assets such as multifamily are much easier to finance given the amount of capital chasing those deals through the government sponsored entities like HUD, Fannie Mae, and Freddie Mac. In addition, we are experiencing banks, debt funds, and other lenders becoming full on hotel allocations given the amount of velocity in the marketplace over the past couple of years. The money is still out there if you know where to find it, it’s just getting more expensive.”
With over $38,000,000 in hotel loans over the past nine months alone the fledgling firm is quickly becoming one of the most active financiers in the hospitality sector in the state. They recently closed 869 keys across 6 properties, which included a Holiday Inn & Suites, two Comfort Inns, a Hawthorn Suites, Day’s Inn, and the Hotel Tucson City Center, an independent best known for the international gem show it plays host to annually.
Despite all of the hospitality activity, multifamily still remains a bread and butter asset class for the duo with 1,265 units financed in the past year.
The two principals of the firm, Adam Finkel and Kyle McDonough, had been close friends for the past 15 years prior to founding the company. Mr. Finkel previously held the position of Vice President at Johnson Capital, one of the largest independent commercial banking firms in the country before it was acquired in late 2014. Mr. McDonough was the director of a local bridge debt fund that placed private money loans for transitional assets during the Great Recession.
“Tower Capital blends both of our backgrounds together nicely,” commented Mr. McDonough, “Ultimately our goal is to produce the most cost effective financing terms and structure that will meet our clients’ investment objectives, whether that’s through a bank, CMBS, life insurance company, debt fund, or our own private money platform.”
Kyle’s sentiments are proven by the numbers. Out of the 19 transactions closed during their first 12 months, 13 different lending sources were utilized, showing their capital relationships run deep across multiple asset classes.
The firm prides itself on being nimble, creative and relentlessly keeping up on the ever changing capital markets climate and knowing at all times who the most active lenders are. Be on the lookout for this dynamic pair to continue carving out a place in the commercial real estate finance world.