Allegiant Real Estate Capital

ORIGINATOR PROFILE

Allegiant is a commercial real estate lender and debt investor that is committed to developing successful, long-term customer and client relationships that are built on integrity, advocacy, and reliability. Founded on a strong and disciplined credit culture, Allegiant offers a deep, discrete understanding of CRE lending and credit, as well as capital markets. Allegiant’s senior management team brings an average of twenty years of specialized experience through multiple CRE cycles, a host of disciplines, and the full spectrum of CRE debt products.

Allegiant employs a dynamic business model with targeted investment strategies. These elements allow Allegiant to offer a comprehensive range of CRE debt products, and to pursue investment opportunities with varying risk profiles in a variety of market conditions. Throughout, each member of the team at Allegiant maintains constant focus on risk management and the preservation of capital.

Originator Highlights

In 2017 to date, Allegiant has successfully originated over $150,000,000 in commercial real estate loans.
The senior team at Allegiant has an average of 19 years of commercial real estate experience.
The senior team at Allegiant has worked together on average for over 10 years.

Origination Process

Deal Sourcing: Allegiant leverages the extensive networks of direct borrower, broker and banking relationships of its investment professionals to source attractive lending opportunities that are consistent with Allegiant’s investment strategy. Allegiant’s senior leadership team is supported by origination professionals and investment and underwriting professionals with significant expertise in executing their strategy.
Screening and Risk Management: When a potential investment opportunity is identified, Allegiant’s origination team performs an initial credit review to determine whether it is beneficial to pursue the potential investment. The review is a collaborative effort between the deal team, the senior management team and other investment professionals. Allegiant has a strict investment philosophy regarding the type of opportunities it will pursue, with a primary focus on capital preservation and downside protection. Key investment considerations include, but are not limited to, loan basis, the location, submarket and liquidity profile of the property, ability to underwrite the sponsor's business plan, the competency, experience and reputation of the sponsor, and borrower cash equity invested, among other considerations. All investment opportunities are reviewed as a team in formal working sessions that typically occur multiple times each week. Allegiant engages in thoughtful and informed discussion around credit, structure and risk factors in an effort to maintain compliance with Allegiant’s investment philosophy and strategy, and evaluate each opportunity based on its expected risk adjusted return relative to other comparable investment opportunities available to Allegiant.
Initial Due Diligence: Allegiant employs a value driven approach to underwriting and due diligence, including a rigorous evaluation of the risk/return profile of the opportunity and the appropriate pricing and structure for the prospective investment. Detailed financial modeling and analysis is used to assess the cash flow and debt service coverage characteristics of the properties as well as interest rate and prepayment analysis. Allegiant completes a thorough, independent value assessment for each opportunity that Allegiant pursues to ensure that their loans provide the borrower with the appropriate level of leverage relative to what Allegiant deems to be a supportable determination of value. Additionally, Allegiant validates its internal determination of value with an independent, third-party appraisal to ensure that its assessment is balanced and comprehensive. Allegiant focuses on investments where the sponsor has meaningful cash or imputed equity subordinated to their position to ensure that there is a buffer between Allegiant’s basis and Allegiant’s determination of value to provide downside protection. Allegiant also assesses the capacity of its borrowers to repay or refinance upon maturity, and understand sensitivities to potential changes in asset performance, market fundamentals and real estate capital markets. Allegiant performs extensive property and market level due diligence, including tenant profiles and credit reviews and market research. The market research incorporates analysis of demographics, key fundamentals such as employment growth and population growth, comparable transactions and the competitive landscape. Allegiant’s underwriting focus is also on understanding the broader capital structure and ensuring that it has the appropriate controls and rights within its prospective investment.
Investment Committee: Upon completion of initial due diligence and a decision by its investment professionals to proceed with an investment, the investment team formally presents the investment opportunity to Allegiant’s investment committee. The investment committee is comprised of a multidisciplinary team of senior personnel. Generally, the investment professionals, with oversight from senior management, are responsible for presenting to Allegiant’s investment committee a credit memorandum on the investment opportunity that provides an in-depth overview of the collateral, borrower, due diligence conducted, key financial metrics and analyses, as well as investment considerations and risk mitigants.
Final Closing: As part of the closing process, Allegiant works with outside legal counsel to complete legal due diligence (including title and insurance review) and document each investment. Allegiant engages industry recognized third-party vendors to conduct valuation, engineering, environmental and insurance review and documentation, among other areas of engagement. A member of its investment team or its consultants, as appropriate, visit the property and the market where the property is located. Allegiant promotes a strict compliance environment whereby they perform comprehensive background verification for each prospective borrower to ensure, among other things, compliance with antimony laundering and know-your-customer requirements, as well as a detailed review of the borrower's experience and capabilities in managing the collateral and executing the specific business plan.
Portfolio Management: Allegiant’s asset management team and its investment professionals are responsible for the ongoing asset management and monitoring of all of Allegiant’s investments through loan repayment. Allegiant’s asset management approach is primarily focused on tracking the financial performance of the collateral, monitoring cash management and reserve accounts and ensuring borrower compliance with the loan terms. Allegiant’s asset management team conducts monthly asset reviews with their investment professionals and holds formal quarterly asset management meetings at which its personnel review Allegiant’s portfolio and assess its holdings with investment committee. Any material loan modification or amendment to a security requires the approval of Allegiant’s investment committee.

Management

Randy Reiff

Chief Executive Officer and Chief Investment Officer

Mr. Reiff is the Chief Executive Officer and Chief Investment Officer of Allegiant and held the same role at FirstKey Lending. Prior to joining FirstKey in 2013, Mr. Reiff was the head of commercial real estate finance and CMBS trading at Macquarie Investments US, a subsidiary of the Macquarie Group, investing capital from Macquarie for commercial real estate lending, debt investing and securities trading and investing activities globally.

Mr. Reiff and his team came to Macquarie when the company he founded, Spartan Real Estate Capital -a commercial real estate focused investment management and advisory firm, was integrated into Macquarie in order to facilitate Macquarie’s entry into U.S. commercial real estate lending and debt investment. Before leaving in 2009 to launch Spartan, Mr. Reiff was a Managing Director and the global head of CRE Finance and CMBS at J.P. Morgan, where he was responsible for all of J.P. Morgan’s global principal commercial real estate finance and lending activities both for balance sheet and for distribution as well as all CMBS trading activities globally.

Mr. Reiff joined J.P. Morgan following its acquisition of Bear Stearns, where he was a Senior Managing Director and global co-head of CRE Finance and CMBS, having similar responsibilities. Before joining Bear Stearns in 1995, Mr. Reiff worked at Citicorp Securities' in the Secondary Mortgage Finance Division, where he was responsible for distressed debt asset management and trading.

Simon Breedon

Managing Director and Chief Operating Officer

Mr. Breedon held the same role at FirstKey Lending prior to the relaunching of FirstKey’s CRE business as an independent investment company under the Allegiant banner. Prior to joining FirstKey in 2013, Mr. Breedon was a Managing Director at Macquarie Investments US, a subsidiary of the Macquarie Group, where he was responsible for the identification, evaluation, and execution of commercial real estate debt investments across all asset classes and across the capital structure. Before joining Macquarie in 2010, Mr. Breedon was a Managing Director at Spartan Real Estate Capital, a commercial real estate focused investment management and advisory firm.

Prior to joining Spartan Real Estate Capital in 2009, Mr. Breedon worked at J.P. Morgan and Bear Stearns where he was involved in the origination, execution and distribution of structured real estate-secured debt and equity financings in connection with LBOs and other M&A related transactions. Before joining Bear Stearns in 2003, Mr. Breedon worked at HSBC in London, where he was an Analyst in the investment banking division. Mr. Breedon graduated from Emory University in 2001 with a B.A. in Economics.

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