Alliant Commercial Loans Surge With Three Big Deals

Alliant closed nearly $37 million in loans in March on these commercial properties (clockwise from top) in Miami, Austin, Texas and Sterling Heights, Mich.

Alliant Credit Union closed $36.6 million in loans in March on properties in Michigan, Texas and Florida, contributing to a first quarter surge in commercial real estate lending.

The closings were part of $169.9 million in commercial real estate loans produced by Alliant in the first quarter, up 47% from $115.8 million a year earlier. Commercial real estate accounted for 12.6% of its total originations in the first quarter, up from 8.4% a year ago.

The three loans were for nearly a half million square feet of office and/or industrial space: a $16 million upsized refinancing in Sterling Heights, Mich., a $10.6 million acquisition loan in Austin, Texas and a $10 million acquisition loan in Miami.

Paul Letourneau, Alliant’s manager of commercial loan originations, said the three industrial sector loans were closed in a period of fast-moving interest rates and volatile markets.

“Investors continue to be attracted to various use of properties in the booming industrial sector,” Letourneau said. “With tailored financing, borrowers are well-positioned to execute their business plans for the properties and benefit from continued demand for industrial and industrial flex assets.”

Paul Letourneau

At the Sterling Heights property, 20 miles north of Detroit, Alliant closed a 5-year-plus loan to refinance a 370,656-square foot industrial building that included 47,856 square feet of office space. The refinancing was strategically executed to take advantage of fast-moving interest rates and the property’s appreciation in value over the past five years.

The borrower was a private investor group that closed the original, smaller loan with Alliant in December 2017. Yonah Sturmwind, a commercial lending specialist originator for Alliant, said the property has had consistent occupancy.

“This asset is a high-quality industrial property in a booming submarket of Detroit,” Sturmwind said. “Alliant was pleased to work with one of our existing borrowers in order to refinance the current loan and provide them with more advantageous terms.”

Yonah Sturmwind

In Austin, Alliant provided the financing for a private investor group to buy the Springwoods Business Center, a 77,985-square-foot property built in 1986 comprising four single-story buildings offering a mix of office and warehouse space. The property is over 90% occupied by 17 tenants.

Terms of the 5-year loan included a rate lock, a full-term interest-only payment structure and a flexible prepayment penalty.

Constructed in 1986, the well-maintained Springwoods Business Center is located about 13 miles north of downtown Austin, in a growing suburb with access to main thoroughfares and freeways.

Jeff Joyner, a commercial loan originator for Alliant, said the property is 13 miles north of downtown Austin in a high-tech sector that has attracted many corporate relocations.

“We worked with accomplished and highly experienced real estate investors to allow them to acquire this well-located, desirable property,” Joyner said. “Austin’s employment base is growing as companies expand or relocate to the area, following strong population growth and demand.”

In Miami, Alliant’s financing allowed a private investor group to buy a 48,355-square-foot multi-tenant industrial flex property in the Little River neighborhood north of the Miami Design and Historic districts. The property encompasses two single-story buildings built in 1972 and 1974, and renovated in 2018 into office and warehouse space.

The property is 93% occupied, with only one vacant unit. Terms of the 7-year Alliant loan included an early rate lock, a 30-year amortization schedule, an earn-out, an interest-only period and a flexible yield maintenance for early repayment.

In recent years, the Little River neighborhood has attracted investors opportunistically redeveloping legacy industrial properties into industrial flex, retail, office and multi-family space.

Joyner said the Miami industrial flex market has a history of strong occupancy levels, positive absorption of new supply, and consistent growth in rental rates—trends he expects to continue through 2025.

“The overall strong metrics of the property, combined with high demand drivers in the submarket, allowed Alliant to provide tailored financing for the borrower,” Joyner said.

Last year Alliant ranked No. 5 among credit unions in commercial real estate loans. It produced $650.8 million, up 78% from 2020. Those loans accounted for 11.3% of Alliant’s total originations last year, up from 7.3% in 2020.

Among all credit unions, total commercial real estate production was $37.1 billion, up 44.3%. Those loans accounted for 4.7% of all originations, up from 3.8% in 2021.

In April, the Mortgage Bankers Association forecast total commercial real estate originations this year will be $895 billion, less than 1% above its $891 billion estimate for 2020.