William McLennan, executive vice president and chief real estate officer of Torrey Pines Bank, got his real estate start in college, then parlayed those skills to banking -- and he's now been a banker for 25 years.
"I was born and raised in San Diego County, and my father was a real estate broker," McLennan said. "Real estate was something I grew up with. Then I worked in construction for a period of time going to college. So when I got out, a number of institutions were looking for people who could be lenders, and I had an advantage because I understood how construction worked."
McLennan worked for a number of small and mid-sized banks before putting his real estate lending skills to use at Torrey Pines Bank. He was one of the initial12 people Torrey Pines brought together to start the bank about six years ago. His specialty there is in construction and term financing across multiple product types in the real estate arena. McLennan said Torrey Pines Bank is a good place to put his real estate expertise to use because the bank is a significant player in the real estate finance market in San Diego.
"In the first couple of years we were smaller than what we can do now. While the number of institutions that can lend has gotten smaller, now our range as a bank has gotten bigger," McLennan said. "Our deals started out at $1 (million) to $2 million, and now we look at new deals in the $10 (million) to $15 million range. Our breadth and capacity is much greater."
While the soft market has impacted the industry, McLennan highlights the opportunities the downturn has presented for Torrey Pines Bank.
"The market is not as active as it was two years ago, and we're seeing adjustments in prices and rates," he said. "But we're seeing more opportunity in income-producing properties -- retail centers, industrial buildings and commercial properties, where the tenants are renters not owners."
Even in this market, McLennan reports that Torrey Pines Bank is making money and is healthy. And, because of its size, he said the bank can approach many different levels of customers to service their borrowing and financing requests.
"We see this as an opportunity for us, as we are healthy and our capital rations are strong -- 14 percent strong," McLennan said. "And because we are healthy and have funds to lend, we are getting the opportunity with quality customers who were too small in the past."
In facing not only market challenges, but also competitive ones, Torrey Pines Bank focuses on its core strength: building relationships.
"We could compete on price, but we choose to compete on relationship and making that not transactional," McLennan said. "For instance, with banks like Wells Fargo, we will out-compete on service; we'll respond quicker and close quicker. We're building our bank on the ability to do that, and this goes hand in hand with senior management's desire to meet with customers in their workplace."
Even in his senior role, McLennan is not only behind the scenes looking at deals, but is also out calling on customers and talking to them with his colleagues. He estimates that he spends about 60 percent of his time assisting with underwriting and management internally and the remainder on calls. This reinforces the bank's emphasis on the importance of the customer relationship -- at all levels. That means customers get to speak directly with decision-makers who can make decisions quickly and provide solutions like underwriting to withstand the ups and downs of the market.
Looking ahead, McLennan sees this type of relationship building as a key not only to banks being successful, but also for those seeking loans to effectively obtain the financing they need.
"There's expected to be a scarcity of capital in the market over the next couple of years," McLennan said. "Our position is that if someone comes in and needs a loan and they have the relationship, we'll find a way to help them. It's important for investors, developers and contractors to find that relationship, whether with us or with someone else, because that will be crucial to their success over the next couple of years."
As for looking forward for the San Diego market in particular, McLennan is optimistic about his hometown.
"There are challenges, yes, but I am thankful to be working in San Diego come Thanksgiving time," he said. "San Diego is a great place to live, lots of people continue to want to live here and businesses want to locate here. Between the standard of living and the natural environment, as well as opportunities to work in biotech or military or university, there are lots of employment opportunities. I expect our marketplace will recover quicker than other markets.
"We're already beginning to see that the low end of the housing market has hit bottom, I believe, and is beginning to come back out."
Blackford is a Los Angeles-based freelance writer.