Observations from Jeremy Wedgbury during the Toronto RealCapital panel discussion "How is the Market Share of Non-Bank Lenders Growing Versus Schedule I Institutions" on February 26, 2019.
1. First National's total commercial mortgage book is now $27 billion.
By the numbers, First National is Canada's largest commercial mortgage lender with a 12% market share nationally.
2. 2018 was First National's best-ever year for commercial mortgage lending.
New mortgage origination increased 8% to $6.2 billion in 2018, with approximately $4 billion in CMHC and the remainder in conventional financings, while renewals increased 18% to $1.3 billion.
3. Non-banks lend across more of the risk spectrum than Schedule I institutions, but that's not the only reason for First National's market success.
Flexibility and creativity in doing deals, including those with A/B structures, cause more borrowers to consider First National but value-added planning and advisory services are the true difference makers.
4. First National has recently added resources and capabilities in Quebec and B.C.
The Company's coast-to-coast market presence has steadily improved in recent years and will continue to advance as we deem boots on the ground to be critical components of our lending strategy in serving the needs of borrowers and First National's investing partners.
5. First National is making a strong push for more self-storage assets.
This asset class has become a popular investment target due to economic and market fundamentals.
6. Strong market demand for new apartment assets remains the core driver of asset expansion.
Apartment construction activity has soared across Canada as developers take advantage of new insured financing options as well as conventional options, both available through First National.
7. Concerns are growing among lenders and developers about the ability to deliver new construction projects.
While apartment rental rates have grown strongly, so have the cost and complexity of construction and these realities are challenging inexperienced builders.
8. At this point in the cycle, lenders are more focused on the quality of sponsorship than ever.
Developers and builders with proven, relevant experience have the best funding prospects at this point in the business cycle.
9. Alberta remains challenged.
While First National is committed to Wild Rose territory, and continues to be active in the multi-family and industrial asset classes, the local commercial market has yet to recover.
10. First National keeps moving forward by avoiding problem loans.
Thorough analysis has made it possible for First National to successfully serve the risk-return needs of its investing partners for 3 decades.