Writer: Max Crampton-Thomas
2 min read May 2021 — Morley Greene, Chairman & CEO of Trez Capital, decided to press pause on lending activity in early 2020 as the pandemic started. Trez Capital has always taken a conservative approach, he told Invest. Investors benefit from their knowledgeable and disciplined leadership team that has one of the longest track records in the industry of consistent returns and capital preservation. Trez Capital is now lending in full-force, after re-starting financings in the last quarter of 2020. Greene is bullish on the residential sector, industrial buildings and the hospitality sector from the Carolinas to the Florida Keys.
What was Trez Capital’s approach to lending activity during the last year?
I started Trez Capital in 1997. I raised $3 million from investors and since that time we have funded over $12.5 billion in loans. We have seven offices, 150 employees and nearly $4 billion in assets under management. We have over 24,000 investors. One advantage of having been in this business for as long as I have, is that you have a lot of experience. While we have not had a pandemic before, we have experienced other challenges.
At the onset of the pandemic, when we realized that things were going to be unpredictable, we decided to stop lending. Something was going on out there and we did not know the severity of it. I have learned over the years that whatever I plan for is never the problem, it is the things I cannot control or cannot foresee that become problems. Last year, I thought we might have a lot of defaults, but we had no defaults. I thought we would not have loan payoffs, but we had a record number of loan payoffs. So, all the trouble we thought we might have, did not happen. As a result, we came through the pandemic in good shape. Now, we are back lending in full force and once again raising investor capital. At Trez Capital we hope for the best and plan for the worst, and that is what we did. We are now back to pre-pandemic business levels and positioned for growth.
What is your current focus in the Florida market?
We are very busy in Florida: Tampa Bay, Jacksonville, Naples, Miami-Dade County and Boca Raton – all are strong areas. We have been very strong in the Florida market and we also like the Carolinas, where the cities are very rural, but vibrant. There are approximately 55 to 60 million people from the Carolinas to the Keys. That is a lot of people and a lot of growth. The most interesting thing is that people from all over are moving to Florida. In fact, during the pandemic about 950 people moved to Florida every day. People are speaking with their feet, and you must listen to that.
Are you now being more careful or selective with the lending process?
We are always selective and always careful. We never forget that the money we lend is not our money, it’s our investors’ money. We invest it carefully and methodically in order to produce strong returns and help them achieve their financial goals. For 24 years, Trez Capital has built a reputation based on integrity and accountability; acting in our clients’ best interest in everything we do. With that being said, we are very bullish right now in the residential sector, single-family housing, and on warehouses and industrial buildings. We are not bullish on the office segment. We do not yet know what’s going to happen in that space, if people are going to go back to the office full-time or not.
How would you compare the COVID crisis with the recession in 2008?
When it comes to the pandemic and the financial crisis, you cannot compare them. 2008 was a disaster. Property values dropped dramatically, especially residential. The aftermath of the pandemic may not be written just yet. We need to wait three or four years as interest rates start going up. That is when we’ll likely see what happens with those who took on too much debt.
In this digitized economy, what is the secret to maintaining long-term client or investor relationships?
When the pandemic started, my biggest concern was how we were going to reach our clients. During the financial crisis, we could meet all our investors and borrowers, we could go and have in-person meetings. We could not do that with all the restrictions and lockdowns during the pandemic. That was a major challenge. People are the foundation of our business. We are relationship focused at Trez Capital and that is how we help clients achieve their financial goals, build thriving businesses, and create opportunities for our employees, partners, and communities. So, we had to rethink a few things. We started using Zoom and we’ve found that very effective. We did a couple of things in order to stay connected. First, we kept all our key employees involved daily so they were always informed about what was going on. Second, we had weekly phone calls with our investors to inform them about what was happening at Trez Capital and about what we were seeing in the real estate industry and economy. The most important thing through the pandemic was to stay connected with our borrowers and investors.
What is your take on the hospitality sector?
There is an opportunity to invest in hotels, travel is going to come back, people are tired of sitting at home. We are evaluating the hospitality sector in terms of investments, but focused on limited service hotels.
How do you see the next 12 to 18 months for your company and the Florida market?
We see more of the same. With a focus on multifamily residential, single-family housing, industrial and limited service hotels. If rates stay low, people will continue to buy real estate and Florida is well-positioned to take advantage of that coming growth. With over 20 originators in North America, Trez Capital works with best-in-class developers to provide speed and flexible financing on many different real estate projects. Trez Capital is looking forward to what the future has to bring. We are invested in bringing our clients’ projects to life.
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