Anglo Irish Bank, North America, is based at 265 Franklin St. in downtown Boston.
From his office window on the 19th floor of 265 Franklin St. in downtown Boston, Tony Campbell, president and chief executive officer of Anglo Irish Bank, North America, can see some prime commercial real estate in Boston. Many of those properties have been positive opportunities for the bank – and there are still many more out there, especially if Campbell’s predictions about the commercial real estate market are correct.
Anglo Irish Bank, North America, was set up in 1999 by current Chief Executive Officer David Drumm. The institution, which has another U.S. office in New York, works with major Boston-area commercial real estate companies such as Boston Properties and Beacon Capital.
“We deal with professional property investors,” Campbell said.
And not just any property investors. In order to do business with Anglo Irish Bank – which Campbell hopes will have a lending asset base of $5 billion within the next three years – a company must be prepared to do business a certain way.
The bank will not compromise on asset quality and doesn’t like to compromise on price. Because of that rigid stance, Campbell admitted, the bank doesn’t score every deal in town.
“We don’t win every deal because price comes into the equation,” he said. “Our business model has worked well in Boston.”
Campbell clearly wasn’t worried about the next deal as he looked out his window and pointed at the “number of rooftops and size of the buildings.”
“Given our size in the market and our model, we’ll get our fair share of what’s going on,” he said.
‘A Lot of Punch’
Anglo Irish Bank prides itself on being adept at assessing a client.
“We’re looking at the caliber of the individual, quality of cash flow and the backstop is the actual asset itself,” Campbell explained.
The mentality behind the bank’s strategy is to build a relationship with the client.
“If you’re dealing with a professional and you’ve got a relationship, then the propensity for them to hand back the keys is much less,” Campbell said.
Unlike other banks that like to build a relationship by starting with a checking account and hoping that it will ultimately score a customer’s mortgage, Anglo Irish Bank is different because it doesn’t offer retail banking.
“It keeps my guys focused,” Campbell said.
However, that doesn’t mean clients haven’t come back for additional services.
“We don’t like ‘orphan’ transactions,” Campbell said, adding that two-thirds of the bank’s business is repeat business.
Some clients have done six or seven deals with Anglo Irish Bank, he added.
One of the bank’s deals that closed about a month ago involved Beacon Capital, which was buying an entire block of space in the Faneuil Hall area. The ground level of the property consists of retail stores, including The Gap, Ann Taylor Loft and American Eagle – a space in which Beacon Capital had no interest. The company planned to purchase the building and sell the retail portion off, but Anglo Irish Bank devised a better plan: It would purchase the retail space itself.
“We own The Gap and all those wonderful retailers,” Campbell said.
The bank was confident in the transaction for a few reasons.
“It’s in a quality location; it’s got quality tenants,” Campbell said, adding that Irish investors will purchase the retail property.
The transaction, according to Campbell, strengthened the bank’s relationship with Beacon Capital.
“It’s a very innovative type of transaction that gives us a lot of punch in the market,” Campbell said.
It’s those types of transactions that Campbell hopes will help grow the business. Already, in the first few months of the year, the business has grown by 26 percent. Over the next three years, Campbell hopes to double the bank’s size in the United States.
Despite its international roots, decisions are made in Boston. The process works like this: a client applies for a loan, the Boston office comes to a consensus on the loan, and only then is the Dublin office invited in for approval and remittance of funds.
“Everything is centrally approved through Dublin,” Campbell said.
He added that the bank is unlike other credit-granting institutions because decisions are made quickly.
“We don’t have layers and layers of decision makers,” Campbell said.
Looking ahead, Campbell said he expects to see a steady pickup in the office market.
“The theme overall is ‘steady, rather than spectacular,'” said Campbell.
Pointing out that property professionals don’t go into hibernation when times are tough, Campbell said there are still low interest rates and reasonable consumer confidence. Admitting that the office space market has been tough, Campbell still said he feels there is a lot of cash out there.
“The buyer and the seller have polar views,” Campbell said. “One is going to be right and one is going to be wrong.”
Anglo Irish Bank is not the only bank in the Bay State with ties to other countries. Massachusetts Bankers Association President Daniel J. Forte cited several other banks with international ties, such as Citizens Bank and its parent company, the Royal Bank of Scotland; and Banknorth’s recent merger with Canada-based Toronto-Dominion Bank. There are also banks in the area that target the international community, such as BCP Bank in Fall River, which caters to the Portuguese community, and the Asian American Bank.
“[BCP is] a recent entry into Massachusetts,” Forte noted.
The mix of international and domestic banks in Massachusetts indicates the strength of the banking marketplace, according to Forte.
“It points to the fact that there is a lot of competition here in Massachusetts,” Forte said. “We’re going to get looked at by a lot of banks.”
Jennifer Jope may be reached at jjope@thewarrengroup.com.
