Many lenders focus on generating new business. MetLife wants to keep the clients it already has. The numbers say the New York-based insurer is doing just that. The company is the nation's third biggest lender and top insurance company, according to American Banker. Eighty percent of its commercial real estate business is from repeat customers. "We have grown because we're focusing on customer service," says Robert R. Merck, senior managing director and head of agricultural and real estate investments at MetLife. "We have a very loyal group of borrowers."
MetLife has a very successful group of borrowers, as well. "We deal with major players," says Merck, who piloted the company to the No. 3 spot on the American Banker list. "We're investing in high-quality assets."
MetLife knows good real estate because it's also an owner, with about $8 billion in equity investments. In October of last year, MetLife sold a major property--Peter Cooper Village and Stuyvesant Town, an 11,000-unit, 80-acre apartment complex in Manhattan--to Tishman Speyer, in a joint venture with BlackRock Realty, the real estate arm of BlackRock Inc., for $5.4 billion. MetLife estimates its earnings on the sale at $3 billion, more or less.
"They're well known, and they own high-profile buildings," says J. Murry Bowden, chairman and ceo of The Hanover Cos. in Houston, one of MetLife's partners on deals. "From a lending standpoint, they've financed some of the premier real estate in this country." A case in point: In April, MetLife announced a deal with Daniel Corp. and Selig Enterprises to develop a 2.5-million-square-foot mixed-use complex in Atlanta, called 12th & Midtown.
Merck's focus on high-quality assets means that he passes on a lot of deals that cross his desk. He estimates that the company only lends on one of every 100 transactions it evaluates. "We focus on the major markets and are well diversified around the country and internationally," he says. The commercial real estate group has eight domestic offices and three international offices.
Many competitors sell loans after closing, but Merck can assure borrowers that MetLife will hold onto their loan throughout its lifetime. "Our long-term perspective distinguishes us from other lenders," Merck says. "Our clients know we have the financial strength and capacity to weather the market cycles."