Mr. Shields, 43, is the managing director of ING Real Estate Finance (U.S.A.), which has a $6.7 billion portfolio of term loans, construction loans and subordinate debt.
ING Real Estate Finance is part of the ING Group of the Netherlands, which provides banking, investment, life insurance and retirement services worldwide.
Q What are your duties at ING?
A We’re primarily focused on first mortgage originations of commercial real estate’s four major food groups: office, retail, residential and industrial. We’re like a little company within ING. I run the group, and that pretty much means everything from new deal originations to approving transactions.
Q Are you doing many debt restructurings?
A Last year we restructured almost $1.6 billion of our existing portfolio, and that was about 17 transactions. They were just deals with issues. In 2009 it was very difficult to get a restructuring done; the client really didn’t know where value was, so you couldn’t get a meeting of the minds for how the restructuring should go.
This year we’ve done about three, and I think we’ll probably end up doing about nine deals, or $800 million to $900 million.
Q Does this drop in deals indicate things are getting better, or that you’ve gotten most of the restructurings out of the way?
A I think it’s both. We’ve gotten through the bulk of it, and last year we started originating new transactions. This year we’re fully in the origination mode.
Q What are your projections for loan originations?
A Last year nationwide we did about $650 million of new originations — brand-new deals — and this year we’ve already closed about $250 million. We expect to be over $1 billion in originations. It’ll just depend on what we see from our key clients.
Right after Lehman Brothers went down, the new-deal flow stopped; we closed two transactions post Lehman.
Q So credit is becoming more available now?
A To strong, creditworthy sponsors on high-quality assets in good markets, it’s available. For smaller sponsors in smaller markets it’s still not that easy.
Q How much equity are you asking borrowers to put in?
A Our loan-to-value ratios have been 60 to 70 percent, so 30 to 40 percent equity. It’s pretty high. Last year we were probably looking at deals in the 55 percent L.T.V. range, so it’s gotten a little more aggressive.
Q Do you work with other lenders on your deals?
A Yes. We’re syndicating some loans to different smaller institutions. On the banking side the hold levels have come down post crisis.
Q Let’s move on to the New York market.
A We’ve been very active in the market. I’d say about 15 percent of our portfolio is here — in Midtown Manhattan.
In the existing portfolio, some situations that we thought were going to be difficult have ended up working out pretty nicely, so we haven’t had a lot of major issues here.
Q You hold the loan for 610 Lexington, on which a Shangri-La Hotel and condominium was proposed. What’s happening there?
A We’re in the process of foreclosing on it. That’s one of the transactions that have been more problematic for us.
Q And what will happen to the property afterward?
A We’re still examining all of our options; there are a lot of things we can do. That site is very high-profile and we’re getting a lot of inquiries from everyone — every major player.
Q Does ING hold much real estate as a result of foreclosures?
A There’s a small loan that was done out of Amsterdam — it’s a land loan — in Annapolis, Md., and it’s pretty small. But that’s it. We really haven’t had to foreclose on a lot of assets; this is the only one. We don’t have a problem owning an asset, but preferably we like to just make loans and not own the assets.
Q There have been a lot of changes within ING, including the recent sale of its real estate investment-management division and the management buyout of ING Clarion. Will this affect your division?
A It’s really not going to have any effect on our business going forward.
Q ING is a title sponsor of the New York City Marathon. Have you had a chance to run that race?
A I am scheduled to run the marathon this year. This would be my first time, my first marathon. This might be the last time that ING sponsors it; who knows?
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