Three years after kicking off its commercial lending business, Brockton-based HarborOne Credit Union is taking a new step into commercial real estate – and they’ve called in a former Legacy Bank vice president to help do it.
Richard Sullivan was senior vice president in the former Pittsfield-based bank, which recently merged with Berkshire Hills Bancorp. A move to the South Shore put him on HarborOne’s radar. There, he is tasked with growing a commercial real estate portfolio, not slowly, he says, but “deliberately.” For HarborOne, it’s going to be a matter of deliberate progress, as well as letting prospective borrowers know that they’re now open for business.
Richard M. Sullivan
Title: President of Commercial Real Estate, HarborOne Credit Union; Brockton
Age: 60
Experience: 35 years
So you moved to Plymouth from Western Massachusetts for family reasons, but how did you happen to find HarborOne?
An associate that I’d done business with for a number of years suggested I call HarborOne. He knew they were trying to grow the commercial real estate business and he thought I’d be a good fit. Friend Weiler, who runs the commercial division and is a longtime banker as well, we hit it off. He thought that I [understood] the problems facing commercial real estate today. You just can’t do every deal, you have to work hard to grow the portfolio, but do it systematically.
So are you building the CRE portfolio from the ground up, then?
We have a department for commercial lending, but I think I would say that they don’t have the expertise in commercial real estate – what we call “portfolio investing” with an institutional investing type program. Most of their commercial real estate is what is called owner-occupied type properties. [For example] we have a business, a fellow making widgets. His real background is making the widgets, not the building he’s in. … Their focus has been more based on owner-occupied versus institutionally owned, investment-owned real estate, where you have developers owning a lot of different real estate. They know how to operate it from the standpoint of getting new tenants in, making sure tenants are happy in the properties … maintaining that property and continuing to improve the property in terms of its quality, whether its parking or ingress or egress etc. All those things are involved with ownership, which sometimes is the last thing that the owner-occupied guy is doing because he’s thinking of whether he has the right machinery to make the next widget.
Was it difficult to come to a new area of the state, where you had fewer professional contacts?
The answer is kind of yes and no. A big part of the answer is no because my background and experience has been both as a national lender both in-market and out of market. … A significant thing about, quote, “little old Pittsfield,” is that it’s an overcapitalized market. There are a fair amount of financial institutions, both banks and life insurance companies and others, yet that area of Massachusetts isn’t growing from the standpoint of the economy and demographics, and you have to deploy your assets elsewhere. So [at Legacy] we had both an in-market and an out-of-market program. When I was at Berkshire Life Insurance, we did nothing in-market, we were all out of market. It was not unusual for investments, especially in commercial real estate, to be more spread out because you want that diversification in your portfolio. HarborOne is basically located in the four counties in the south side of Boston. But the demographics are tremendous down here in terms of what the past has been what it’s continued growth is. …We’re not going to do any skyscrapers in Boston in terms of finance, but we’re going to do some nice shopping centers, some good warehouse buildings along the interstate, we’re going to do some nice office. We are limited in lending. We’re about $1.8 billion in assets, but we can only deploy 12 and a half percent of our assets in commercial lending. That would be like $250 million. We’re not going to get there overnight. We’re only at $30 million now. We have a lot of room to grow.
Top Five Reasons For Making A New Start On The South Shore:
1.) It’s closer to family. His new home in Plymouth puts him much closer to Boston, where his grown children now live…
2.) … And also closer to one grandson, with another on the way.
3.) There are more lending opportunities. The Berkshires are rich in financial institutions, but aren’t as economically fertile as areas closer to Boston.
4.) There’s generally better weather by the ocean than in the mountains.
5.) Sullivan himself isn’t much of a beachgoer, but his family likes proximity to the sea.
