A Letter From Don Williams

Greetings! 

2020 is obviously in the books, and by the final numbers at Medalist Capital, it was an excellent year. However, it was an extraordinary year considering what our industry, country and world endured as we forged through. The actual numbers are revealed below. The milestones include crossing the $3 billion mark in servicing and closing more loans in a year than we ever have, including 24 loans in December for our largest month ever. We achieved those results while effectively having a 75-day period of virtually no loan originations as our entire nation and industry tried to process the impact, near term and long term, of the sudden economic lockdowns imposed due to the COVID-19 crisis.

Historically in commercial real estate, sudden economic disruptors and turmoil have caused capital providers to retrench, initiating a period of illiquidity, which then magnifies the disruption that started it all. It is often a dark and fear-laden freefall into a recession, many times causing economic hardship that did not have to happen. Liquidity (or lack thereof) ultimately determines our industry’s short-term fate in those moments. In March, April and May 2020, we were staring at unprecedented disruptors due to the economic shutdown being caused and even mandated. This time, leaders within the FDIC and NAIC had the wisdom to preserve liquidity by encouraging banks and life companies to work with their clients to grant necessary loan modifications. It worked! For the most part, our industry is bridging the COVID crisis pretty well. We all had to hold hands, listen and trust one another. Once again, it worked. I have great respect for how most lenders reacted and thank them immensely. Now I want to dedicate this letter to the team at Medalist Capital, especially the servicing team led by Patrick Simpson.

At the end of February 2020, Medalist Capital was servicing 466 loans totaling $2.95 billion with no delinquencies. In our 16 years of corporate existence, we processed two loan modifications – a testament to the quality of the loan portfolio. TWO in 16 years! In April, May and June, the Medalist team would process loan modifications for 88 loans (19% of the portfolio). This is where “team” and “client relationships” become real terms, and ones you either live daily or stop using. All of our analysts converted much of their time to assisting our servicing team. All of our producers spent hours and hours talking through our borrowers’ issues and coaching them through the options. We then played a pivotal role ensuring everything was done to their satisfaction as best we could. At the same time, our Medalist team worked hard to ensure that our lenders’ loans were properly secured and risk was properly managed, while advising them as best we could regarding the status of assets, rent rolls, markets, sponsors, etc. As said earlier, we all had to hold hands, listen and trust! Today, we only have two loan modifications that continue. All of this reaffirmed to me that I am surrounded professionally by:

1. A hardworking and caring team at Medalist who goes the extra mile for each other, our lenders and our clients. It’s an honor to work with you, and you make me proud on so many fronts!

2. Some of the best relationship lenders in the country who have empathy and understanding in some of the most complex and unexpected situations.

3. Clients and borrowers who are seasoned, ethical and trusting and who value the role Medalist plays in the capitalization of their assets.

We anticipate 2021 being another stellar year due to our experienced and growing team of producers, our geographic presence in the Southeast, our incredible lender relationships, our many repeat and healthy clients, and the new clients we seem to add weekly. Our entrepreneurial and customized approach to the business remains old school, and in our view, is highly beneficial to all parties in every transaction. Our equity placements and mezz business continue to grow as well, thanks to Brad Morgan. Lenders have full allocations for 2021, but many put the highest desire on multifamily and industrial loans; however, please know that we are still very active with the other product types. In my view, there will likely be some disruptions in the coming 24 months. We recommend increasing liquidity and minimizing maturities in the near future. We can assist with loan extensions, early refinances or sales. When pursuing a transaction, we recommend having a sense of urgency more than ever. 

I would be remiss not to acknowledge that some in our industry are suffering greatly, especially our friends in retail and hospitality. Better days are ahead! Call your contacts at Medalist if we can help. In closing, we made it to 2021 by working together and respecting others’ situations and needs. I applaud our entire industry, though we still have a ways to go. I pray that our country can exercise some of the same kindness, empathy and respect as we work together to resolve political, cultural and economic differences. Medalist Capital thanks you for your loyalty and confidence. We are so grateful for the many relationships and commit that we will continue to serve you with integrity and hard work at all times.