With several high-profile projects in its portfolio, commercial real estate lending continued to be a boon for Technology Credit Union in 2013.
The $1.7 billion financial institution in San Jose, Calif., said in December it closed on a $10 million commercial real estate loan to developers Pelio & Associates to provide long-term financing for the Los Gatos Motor Inn located in Los Gatos, Calif.
The Saratoga, Calif.-based Pelio & Associates constructed an 8,700 square-foot commercial building on the property in front of the hotel, and completed phase one of renovations, according to Tech CU. Phase two, including extensive guest room and interior refurbishment and upgrades, is expected to be finished by February, the credit union said.
When complete, Tech CU said the renovations will transform the Los Gatos landmark into a higher-end property “that delivers the kind of experience guests who stay in the small, affluent town expect from their accommodations.”
With its new facelift, the hotel will also sport a new name: Inn of Los Gatos.
These types of projects are exactly the ones Tech CU wants to pursue – financing regional, niche real estate projects for experienced borrowers who have a deep understanding and knowledge of local market dynamics, said Tech CU Chief Banking Officer Joe Anzalone.
“Larger, national lenders can tend to avoid specialty projects like this one, but we didn’t hesitate to embrace the opportunity, given our respect for the sponsorship,” Anzalone said.
He added, “I’ve had the opportunity to lend to these principals on many projects over a 20-year period and have seen their skillful approach to real estate development proven time and again.”
John Shank, a partner at Pelio & Associates and part of the team overseeing redevelopment for the Inn of Los Gatos, said his firm has worked with Anzalone for more than 25 years.
“Their knowledge of financing in the Bay Area market is invaluable to us. It makes for a win-win on both sides,” Shank said of Anzalone and his team at Tech CU. “Our projects succeed because they’re grounded in detailed, strategic planning and strong relationships that support us along the way.”
Tech CU was involved in several notable CRE projects in 2013. In July, the cooperative said it closed on a $3 million residential construction loan to fund a four-unit townhouse development in Menlo Park, Calif.
Last March, the credit union said it also closed on a $9.5 million loan to support the refinancing of a multi-tenant property that is located in downtown Mountain View, Calif., and counts Google Inc. as one of its tenants.
In addition, Tech CU approved a $5.14 million loan to support the purchase of an historic South of Market office building in San Francisco.