Commercial Loans Blog

C-Loans Adds a New Tombstone Feature

Posted by George Blackburne on Fri, Dec 23, 2016

Tombstone.gifTo understand our new feature, you need to understand tombstones.  A tombstone is an annoucement of the successful closing of some financial deal, like taking a company public or closing some large loan or bond issue.  Historically tombstones were placed in financial publications, like the Wall Street Journal, the Financial Times, or the New York Times.

The announcements were rectangonal in shape and oriented in a portrait mode.  They literally looked liked tombstones.  The content was always very dry.  "Goldman Sachs is pleased to announce the secondary offering sale of 2,000,000 shares of Chrysler Motors at $100 per share for a total equity raise of $200,000,000.  Morgan Stanley and Credit Suisse participated in the offering."

The Securities Exchange Commission ("SEC") for many years forbade the public advertisement of securities offerings.  Therefore tombstones were therefore always backwards-looking.  They announced the closing of some securities offerings.  Since the deal was already closed, and any reader of the tombstone could no longer buy a piece of the offering, a tombstone was not considered an advertisement.

 

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So why would an investment banker, like Goldman Sachs in my example above, pay the Wall Street Journal $10,000 or more to publish a tombstone for a deal that was already closed?  The advertisment was not going to bring in new investors for the offering because the offering had already closed.  The offering was already fully-subscribed; i.e., sold out.  Answer:  The tombstone told other motor companies, like GM and Ford, that Goldman Sachs stood ready to raise a secondary offering for them as well.  It also told other investors to call Goldman Sachs if they had investment dough burning a hole in their pockets.

Modernly commercial real estate lenders publish their tombstones online on their home pages, in their newsletters to their clients and brokers, and in the online version of trade magazines, like the National Real Estate Investor or Globe Street.  It is always smart to study every commercial loan tombstone that you can find because by studying what commercial loans a lender has already closed, you will know what kind of new commercial loans that the lender is seeking.  In other words, be sure to read tombstones!  :-)

 

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C-Loans.com has just added a new tombstone feature on our home page.  Ten seconds after arriving on our home page, a series of rotating tombstones will appear.  The one you will see today is for a commercial loan closed by Alicia Gandy, our top producer who we call our Loan Goddess.  You will notice that the tombstone brags about a $650,000 closing of a permanent loan on a strip center in Tulsa, Oklahoma.

 

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If you click on the link that reads, "More Info and a Mini-App", you will be taken to a page that tells you more about this particular lender, in this case Blackburne & Sons Realty Capital Corporation.  You'll see the lender's preferences in terms of loan sizes, loan types, property types, and lending area.  You can also apply directly to this hungry commercial lender by filling out the mini-app.

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Topics: tombstone

Commercial Loan Closings and Tombstones

Posted by George Blackburne on Thu, Apr 4, 2013

Tombstone?  What on earth is a tombstone, and what does a tombstone have to do with commercial real estate finance?

First you'll need a little background.  Investment bankers - companies like Goldman Sachs and Merrill Lynch - are not allowed by the SEC to publicly advertise many of their investment offerings.  For example, let's suppose that Merrill Lynch is selling commercial mortgage-backed securities.  Merrill Lynch is not allowed to take out a big ad in the Wall Street Journal and say, "Hey, everybody, come and invest in our latest commercial mortgage-backed securities offering.  These CMBS bonds are paying 4%, and they are very, very safe."

On the other hand, Merrill Lynch is allowed to boast about the successful placement (sale) of an investment offering. The investment banking company might boast in a huge advertisement in the Wall Street Journal something along the lines of, "Merrill Lynch is pleased to announce that it has successfully closed the sale of $1 billion worth of commercial mortgage-backed securities priced to yield 4.0%"

"Gee, George, such a big advertisement in the Wall Street Journal might cost $65,000.  That's an awful lot of money to pay just to publicly pat yourself on the back.  Why would they waste the money?"

Answer:  When investors see an advertisement like that, they think to themselves, "Gee, I wish I had invested in that deal.  I never even got to see it.  I'd better call Merrill Lynch and get on their distribution list so that I hear about the next offering."  Merrill Lynch then fields a bunch of incoming calls from hungry investors and lines them up to invest in their next offering.

When you see these ads in the Wall Street Journal, they are typically rectangular in shape, placed vertically of the page.  They look like tombstones, so hence the name.

Just like investment bankers, commercial mortgage lenders also like to boast of deals that they have recently closed.  In the old days, commercial lenders placed similar tombstones in financial newspapers and real estate magazines.  Modernly, most commercial lenders use email to publish a tombstone announcing their latest commercial loan closing.  In stark contrast to the $65,000 tombstone in the Wall Street Journal, email is almost free.

Now we come to the point of today's commercial mortgage finance training lesson.  Blackburne & Sons has recently enjoyed tremendous success using tombstones to market its commercial hard money lending programs.  Tombstones are proving to be even more successful than our entertaining and educational newsletters.  We now try to alternate between a tombstone and a newsletter every ten days.  Here is an example of one of our recent tombstones.

You don't have to be a commercial lender to publish an email tombstone to all of your clients.  If your little commercial mortgage company closes a nice commercial loan, I strongly urge you to send out an email tombstone to all of your contacts.  They seem to work better than any other form of commercial mortgage marketing that we have ever used.


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Topics: tombstone