Art behind real estate financing
Scott Taccati is president of Trillium Capital Resources, based in Columbus. He works to obtain financing for commercial projects such as apartment complexes. Scott Taccati knows his numbers, having spent more than 25 years in the very structured world of banking, his final stop at Regions Bank in Columbus. Over time, Taccati has found a sweet spot in the much more entrepreneurial world of commercial real-estate financing, specifically in helping apartment developers land competitive loan terms for their projects. To date, his company Trillium Capital Resources has closed on about $300 million in loans and is looking for more, with interest rates still very low and the apartment market near its peak.
For starters, was it at all scary to go out on your own after so long with the banks?
No. I went ahead and got a real-estate license just as a backup for commercial real estate. But Columbus has fairly limited commercial real-estate activity. It’s not like Atlanta or a larger market. There’s some very good apartment activity here. I started Trillium Capital Resources because I had been involved with capital markets financing in the late ’80s, and basically what that is non-bank financing. Funding is provided through insurance companies or through Freddie Mac or Fannie Mae. You’ve probably heard of CMBS (commercial mortgage backed securities). It’s like Wall Street where they pool loans together. I still had some contacts in that arena and was involved in loans for 25 years. So I didn’t do anything different other than go out on my own and not have to wear a suit and tie. That was in 2010, and I’m still cranking here. (laughs)
You line up financing for projects in the Southeast?
The Southeast is our target market. We’re now working on a $35 million (construction) loan outside of Atlanta with HUD construction. We actually found the land and helped get it rezoned.
Apartments are your bread and butter?
Yes, probably 90 per cent of everything we work on is apartments.
Senior housing is a growth area with the aging population?
Yes. We’re working on two deals up in North Carolina — senior housing, skilled nursing, nursing homes. They’re $24 million between the two of them. We are an authorized correspondent for different lenders, including Aegon Real Estate USA. They do billions of dollars a year in loan production. And we’re an approved correspondent for Red Mortgage Capital, which is our primary lending source for apartments and senior housing.
Are there hundreds or thousands of companies like yours out there?
There are hundreds, I would say. But these major lenders, they really only want to deal with certain companies. So not just anybody can call these lenders. We’ve been able to establish three large relationships that pretty much cover the gamut of the CMBS market — Fannie Mae, Freddie Mac, HUD — and insurance. Those are the major sources of commercial real-estate money.
Is it about the art of closing the deal?
Definitely. It is an art, and you have to evaluate everyone’s personalities and what’s motivating them or what’s not motivating them … It’s trying to understand what drives the buyer.
How many clients do you have?
We have a base probably of a dozen clients, and then the prospecting of it is limitless. But we’ve actually closed about $300 million in loans since we started. It was in 2011 when I was really starting to get going good, because I was just starting up in 2010 and getting marketing material ready. But over four or five years, $300 million is not chump change for a little shop in Columbus, Georgia.