Michael A. Lee
Michael A. Lee
Title: Executive Vice President, Managing Director, Commercial Real Estate Banking, Santander
Age: 58
Experience: 36 years
Rhode Island native Mike Lee got into banking after he shadowed a family member who worked in financial services. He started off as an auditor in asset-based lending before enrolling in a loan officer development program and ultimately settling into commercial real estate lending. Since he got into the business more than three decades ago, he’s witnessed remarkable changes in the industry, but he’s stuck with real estate for one simple reason: the people.
Q: What types of properties does Santander like in the Greater Boston area?
A: Rather than focus on selective asset classes, we look at the clients that we bank – and many of them are repeat – and where they choose to deploy their capital.
The largest concentrations today are in multifamily, retail and office space. Besides our focus on being a relationship lender, there’s another part of our business and that’s multifamily lending. We’re an active multifamily lender, we have a portfolio of about $10 billion, so we’re relevant in that space. It’s something that we do primarily in the metro New York Market market. I see today that the markets are in equilibrium; we’re in the sixth year of a recovery, so I think there are still opportunities.
Banks look at the health of an industry based on asset quality metrics and the things we see today in our portfolio: low delinquencies, low nonperforming loans, we see very good opportunity.
The other thing in real estate would be the fundamentals on vacancy and on job growth. In the Greater Boston market we continue to see expansion happening, so we think it bodes well for the near term.
Our strength would probably be in multifamily and project-based construction. Those are our two basic businesses. Construction lending is unique because of the nature of it. You have to have a strong infrastructure and operational group to support that activity, so there is an expertise. We’re fortunate to have a very skilled and deep team there.
Q: What are your thoughts about the competitiveness in the market right now? Do you see many nonbank lenders trying to encroach on your territory?
A: There are many strong competitors out there. I think the markets are large enough that there’s ample activity. I like to think we’ve done fairly well and we’ve been garnering more market share, but generally speaking, I think there’s a good discipline that exists in the market with all of the lenders. Equity is behaving like equity and senior debt is behaving like senior debt and as a result, I think they’ll continue to be opportunities for lenders as we see growth in the marketplace.
If you look at the traditional structures, the commercial banks have played the senior debt role. There are mezzanine lenders active in the marketplace. More recently, there have been some players who have moved into the commercial bank space. The specialty we provide in construction lending still seems to be the traditional commercial bankers. Occasionally we’ll see some life science companies that will do a sizable construction project if they’re looking to that as being an eventual term opportunity for them – they’ll do the front-end construction piece with the objective of also financing the term piece.
But generally, especially in the construction lending space, we’re seeing not as much disintermediation.
Q: What are you doing to build up your bench of up-and-coming talent in commercial lending?
A: What we look at in our organization, there are certain schools and universities that provide strong tech training. The industry itself as part of the efficiencies that have occurred over the last 20 to 25 years, these training programs that existed when I first broke into the business are no longer available, so you either look to colleges or universities or you develop your own training.
We look to bring in folks who have the rudimentary skills and then we’ll supplement those. There are industry and trade organizations that provide that ancillary training. In our particular business, there would be a trade association that would offer certain skills training and we encourage and support our employees in participating in those.
If you were in the cash flow part of the business, mortgage bankers association or RMA maybe, they also provide training programs. What’s happened is while the industry may not provide these multiyear training programs, the industry associations have filled the void and are providing that important training.
Top Five Songs On Lee’s Playlist:
- “Mack the Knife,” Bobby Darrin
- “Hey Jude,” The Beatles
- “Born in the USA,” Bruce Springsteen
- “Breezin,’” George Benson
- “Hot Hot Hot,” Buster Poindexter
