Second-Tier Loan Demand Rises
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Burwell says second-tier is a broad swath where growth is occurring or headed next.
SAN FRANCISCO—The capital flight, if not flood, into primary markets such as San Francisco and Los Angeles is having interesting effects on the rest of borrowers, asMichael Burwell, CEO of Redwood Mortgage, tells GlobeSt.com in this EXCLUSIVE.
GlobeSt.com: Volatile global markets are one reason capital continues rushing into California, but not all golden-state markets are equal. What’s happening in the second tier?
Michael Burwell: Redwood Mortgage is a situation and entrepreneurial-opportunity lender, meaning we provide capital where institutional bank money doesn’t fit. And we’re finding a significant rise in demand in markets just outside the institutional-grade sectors such as SOMA, Mission Bay and the Financial District of San Francisco, or core markets in Los Angeles and Orange County. Real estate owners and investors who see property opportunity outside the core are very active in positioning their real estate for growth, but traditional lenders are operating under tighter lending parameters and restrictions launched by the Great Recession. That’s the new reality. But second-tier is a broad swath where growth is occurring or headed next, everything from close-in markets such as South San Francisco, Burlingame, CA and the I-80 corridor of the East Bay up to Sacramento, to Southern California markets such as Glendale, CA; North Los Angeles and even parts of Orange County and Riverside, CA. In essence, California job growth in desired urban markets is boosting housing and commercial demand at the next level…
